COMMISSIONER OF INCOME TAX Vs. S VIJI

JUDGEMENT

(1.) AS to whether an employee to whom a car is provided and the use of the same by such employee for personal use is also permitted, such an employee can claim the benefit of the standard deduction in respect of the assessment for the assessment year 1977-78, is the question that arises for consideration in this reference made by the Tribunal at the instance of the Revenue.

(2.) THE assessee was a whole time executive director of Brakes India Limited. He was allowed the use of the car belonging to the company on condition that he paid a sum of Rs. 100 for any use of the car for private purposes. THE Income-tax Officer, on this admitted position, reduced the standard deduction under Section 16(i), proviso clause (ii), on the ground that the assessee had not been provided with a vehicle wholly and exclusively for official purposes and the deduction was allowed only in a sum of Rs. 1,000. THE Appellate Assistant Commissioner agreed with the Income-tax Officer. THE Tribunal, however, has allowed the claim of the assessee in full. Its reasoning was that the employer had been reimbursed by the employee to the extent he incurred the expenditure on the personal and private use of the vehicle by the employee, and, therefore, the vehicle must be regarded as having been made available to the employee wholly and exclusively for the purpose of his duties.

(3.) OUR answer to the question that has been referred to us is, therefore, in the negative, in favour of the Revenue and against the assessee.