TMI Blog2004 (10) TMI 262X X X X Extracts X X X X X X X X Extracts X X X X ..... We approve the same and decline to interfere in the matter. 3. Ground No. 1 is thus dismissed. 4. In ground No. 2, the assessee is aggrieved that the CIT(A) has erred in confirming the addition made by the AO under s. 28(iv) of the IT Act, 1961, in respect of foreign travelling expenses of Rs. 1,17,030. 5. The material facts are not in dispute. The assessee is a film director and his work involves travelling abroad in connection with shooting of cinema films. In the course of one such foreign trip in May and June, 1996, which was to shoot some sequences for the film 'Hero No. 1', assessee's wife and their two children also accompanied him to the United Kingdom and Switzerland. It is an admitted position that air fares in respect of this travelling by wife and children were borne by the client, i.e., producer, for whom the assessee was working on this project. While there is no dispute that so far as assessee's foreign travelling expenses are concerned, which were also borne by the client producer, the same do not have any tax implications in the hands of the assessee, the core of this dispute is whether or not the travelling expenses in respect of the family members so borne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rofessional services rendered by the assessee, or, to put it differently the payment of professional services was partly made by the producer by defraying the travelling expenses of assessee's family. There is also no dispute that the consideration that he has received for directing the said film, i.e., Rs. 40 lakhs, has already been separately brought to tax under the head 'income from business and profession'. Therefore, so far as intent of legislature in making the said amendment is concerned, the case before us is certainly not covered by that. The next question is whether part of the remuneration was received by the assessee as defraying of his family's travelling expenditure to assessee's temporary place of work. It is not even Revenue's case that the payment of professional fees is made in the garb of defraying the family's travelling expenses to the place of assessee's work. There is also no material before us to lead us to such a conclusion either. 9. The scope of expression 'perquisite' and 'benefit' also requires to be examined. The words 'benefit' and 'perquisite' have been used together in the statute. It is well settled, as noted by Maxwell in his oft referred book ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so rendered outside India, and during which the assessee was thus temporarily located that his family's travelling expenses were borne by the client. The travelling expenses having been met by the producer cannot be a perquisite because the travelling itself was necessitated by the fact that the assessee had to render the services outside India. The very nature of assessee's work is such that he had to spend a good deal of time outside India, and the family's travelling expenses were admittedly in the course of such temporary relocations. Therefore, these expenses being met by the producer-client cannot be held to be in the nature of a perquisite and, therefore, in the nature of income. If such a narrow interpretation of 'perquisite' is to be adopted, as is canvassed by the Revenue, it will result in absurdities like travelling expenses of the family members to join even a Government servant in his place of posting being viewed as 'perquisite', since the family members travelling to the place of posting is a 'benefit', in that narrow sense of the expression 'benefit', to the Government servant, and since, after all, the services are to be rendered by the Government servant and not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the assessee as advance remuneration for film direction. The authorities below, however, doubt that it was in the nature of professional income, even though the same is taxed as an income from business and profession. Agreement dt. 28th Nov., 1997, is also to the effect that this amount was taken payment towards acceptance by the assessee for directing the film. The factors which led the authorities to decide against the assessee are that the direction of the film had not hitherto started; that though the agreement was of 28th Nov., 1997, the amount was received on 13th Sept., 1996, i.e., prior to the execution of the agreement; that no further action had been taken by the assessee with regard to the proposed film; that the assessee furnished no proof that the receipt was in exercise of his profession; and that though the production of the film was not started, Shri B.S. Dogra, the remitter took no steps to retrieve the money. The CIT(A) has confirmed the action of the AO, and, aggrieved by the confirmation of this disallowance by the CIT(A), the assessee is in appeal before us. 15. We may also refer to the letter dt. 28th Nov., 1993 addressed by Shri B.S. Dogra, the payer, t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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