COMMISSIONER OF INCOME TAX Vs. SUREKHA P KOTHARI

JUDGEMENT

(1.) THE assessment year is 1985-86. THE questions referred for our consideration are:- "1. Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the foreign travel expenses incurred on behalf of the assessee by the company in which her husband is the managing Director cannot be assessed in the hands of the assessee u/s 2 (24) (iv) of the Income-tax Act" 2. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in cancelling the CIT's order u/s 263 dated 27. 3. 89 holding that the amount of Rs. 53 ,48 7 being the foreign travel expenses of the assessee met by M/s Kothari Industrial corporation Ltd. Cannot be treated as perquisite in the hands of assessee""

(2.) THE assessee had accompanied her husband mr. P. V. Kothari, who was the Managing Director of the company when he went to europe and U. S. A. between 27. 4. 1984 and 7. 6. 1984. THE expenditure incurred on her travel was paid by the company, Kothari Industrial Corporation Ltd. , of which her husband was the Managing Director. THE assessee herself has no official connection with the company except the fact that she was the wife of the Managing Director.

(3.) IN the two aforementioned decisions it was held that the payment that was made by the company was a gratuitous payment and could not be regarded as one having been made out of commercial expediency.