COMMISSIONER OF INCOME TAX Vs. KAMALINI GAUTAM SARABHAI

JUDGEMENT

(1.) THE following question has been referred to this Court by the Tribunal under S. 256(1) of the IT Act, 1961 :

(2.) FOR the asst. year 1972 73, the assessee filed a return of income disclosing total income of Rs. 81,289. The assessment was completed on 10th March, 1975. Later on, the ITO, during the course of assessment of M/s Karamchand Premchand Pvt. Ltd., came to know that the said company had incurred expenditure on the foreign tours of one of its directors Gautam Sarabhai and his wife Smt. Kamalini, the assessee. He also noticed that for the tour of Smt. Kamalini, the company had expended Rs. 39,753. In view of this information, the ITO reopened the assessment and ultimately included the said amount of Rs. 39,753 in the total income of the assessee and assessed it accordingly. The assessee then preferred an appeal to the AAC but the same was dismissed as the AAC was of the view that there was no material to show that she had gone abroad for the purpose of business of the company and, therefore, she can be said to have obtained benefit to the extent of Rs. 39,753. The assessee then preferred an appeal to the Tribunal. The Tribunal held that it cannot be said on the basis of the material on record that the assessee had ever approached the company either directly or through any one else for obtaining the benefit or perquisite in question. Therefore, the first part of S. 2(24)(iv) was not attracted. The Tribunal also held that there was no material to show that, if the sum in question had not been paid by the company, it would have become payable by the assessee's husband, who was a director of the company. Therefore, second part of S. 2(24)(iv) was also not attracted. The Tribunal, therefore, allowed the appeal and directed that the said sum be excluded from computation of the assessee's total income. The Revenue, feeling aggrieved by the said order, then moved the Tribunal for referring the abovestated question to this Court.

(3.) IN our opinion, this contention is really misconceived. The question whether the assessee can be said to have received any benefit or not is a mixed question of law and fact as what this Court has to decide is whether on the facts found she can be said to have received benefit as contemplated by S. 2(24). The Tribunal has found, as a matter of fact, that she had not approached the company either directly or through any one else. Whether she got any advantage or gain was neither considered by the AAC nor by the Tribunal as, possibly, this aspect was not brought to their notice. The AAC proceeded on the basis that, since the foreign tour was not undertaken for the purpose of business of the company, it was for the benefit of the assessee. The Tribunal proceeded on the basis that the said benefit in any case cannot be said to have been obtained by the assessee inasmuch as she had not made any attempt to procure the same. It is, therefore, open to us to consider whether, in view of the facts found, the assessee can be said to have received any benefit as contemplated by S. 2(24)(iv).