COMMISSIONER OF INCOME TAX Vs. BAWA SINGH CHAUHAN

JUDGEMENT

(1.) THIS reference under S. 256(1) of the INCOME TAX ACT, 1961 (hereinafter referred to as "the Act"), raises the following question for the opinion of the Court :

(2.) THE assessee is an individual deriving income from a steel re -rolling mill at Kamptee. The assessment year to which the question relates is the year 1964 -65 relevant to the previous year ended on 31st March, 1964. Besides deriving income from property, the assessee is also a managing director of a company known as Bawa Iron & Steel Works Ltd., (hereafter referred to as "the company"), which had its registered office at Sonepat. The assessee received a remuneration of Rs. 9,750 from the company. The company provided the assessee with a rent -free house, a car and a telephone and a few other amenities which were not specified. In respect of all these perquisites, the ITO estimated their value at a sum of Rs. 2,400 as in the previous year and included it as income of the assessee. The assessee did not show any value for these perquisites on the ground that the assessee had not used the perquisites provided by the company. The ITO negatived this contention and included the value of Rs. 2,400 in the assessment. Aggrieved by this addition, the assessee preferred an appeal to the AAC. The AAC, on the facts and in the circumstances, thought it fair to make an addition of Rs. 2,000 by way of perquisites. He thus reduced this addition by Rs. 400.

(3.) IT is necessary to notice the provisions of ss. 15 and 17 of the Act. Sec. 15 reads as follows :