LAKSHMIPAT SINGHANIA Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is a reference under Section 66(1) of the Income-tax Act. It relates to the assessment years 1955-56 and 1956-57 The following common question of law arises in both the years which has been referred to us for opinion :

(2.) THE assessee, Lala Lakshmipat Singhania, was at the material time a director of J. K. Jute Mills Co. Ltd. He was provided free accommodation by the company in its house known as "J. K. House" at Calcutta. THE Income-tax Officer treated the free use of the said property in the hands of the assessee as a perquisite under Section 2(6C) of the Indian Income-tax Act, 1922. THE value of the rent-free accommodation was fixed at Rs. 19,440 for each of the two assessment years and, along with other benefits, was assessed to tax in the hands of the assessee. THE assessee's appeals have been rejected both by the Appellate Assistant Commissioner of Income-tax and the Income-tax Appellate Tribunal. THE assessee is aggrieved and has brought this reference before us.

(3.) THE other contention of the learned counsel is that Section 2(6C) would only apply if the benefit is received by a person in the capacity of a director and not merely because he happens to be a director. We find no force in this contention either. As soon as a person receives a benefit from a company and he happens to be a director of that company, Section 2(6C) would immediately be attracted and the value of such benefit would be deemed to be his income. THEre is no further requirement of any kind. In any case there is a finding recorded by the Tribunal that the assessee received the benefit or perquisite in his capacity as a director of the company. This finding has not separately been challenged by the assessee.