COMMISSIONER OF INCOME TAX Vs. VAIDYA M K

JUDGEMENT

(1.) IN respect of the asst. Years 1978 79 and 1980 81, the following question has been referred, under s. 256(2) of the IT Act, 1961, (the 'Act' for short):

(2.) THE assessee was an employee of the company called 'MICO'. The company advanced him certain amount as loan free of interest for the purpose of house building. This was the policy adopted by the company and several employees had obtained such loans is not a matter in dispute. In the course of the assessment of the assessee, the assessing authority held that interest free loan was a benefit which should be valued as a perquisite.

(3.) IT was contended on behalf of the Revenue that the interest free loan is a benefit which should be treated as a 'perquisite' under S. 17(2)(iii) and for the purpose of computation r. 3(g) is attracted and that the principle underlying cl. (vi) inserted to S. 17(2) by the Taxation Laws (Amendment) Act, 1984, could be looked at for this purpose.