SRIRAM REFREGERATION INDUSTRIES Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) This appeal is preferred by the assessee, against the order dated February 10, 2000, in I.T.A. No. 1721/Hyd/96 passed by the Income-tax Appellate Tribunal, Hyderabad Bench "B" (in short "the Tribunal") raising the following four substantial questions of law. The present case is pertaining to the assessment year 1995-96.

(2.) The learned counsel for the assessee, Sri Y. Ratnakar, would contend that the amount paid to the employees is in lieu of providing transport facility otherwise would not have been part of salary. He would draw the attention to section 17(2) of the Act and in particular to the Explanation to contend that if the assessee had provided a vehicle to enable an employer for the journey from his residence to his office or other place of work, or from such office or place to his residence, the benefit or amenity granted or provided to the employee at free of cost or at a concessional rate shall not be treated as a perquisite.

(3.) On the other hand, the learned counsel for the Department, Sri S.R. Ashok, assisted by Sri S. Seshidhar Reddy, would contend that the assessee's claim all along is only under section 10(14) of the Act and in that view of the matter, the argument advanced for the first time before this court that the amount paid would fall within the scope of section 17(2) of the Act and the explanation cannot be permitted and accepted. He would reiterate that in the absence of actual expenditure, the amount cannot be allowed as an expenditure wholly, necessarily for the purpose of businesses of the assessee. He would also point out that the amount that is being paid to the employees cannot be allowed as an expenditure under the head "conveyance allowance" as such expenses are expected to be met by the employee and for which the employee is entitled for the standard deduction when his income being assessed under the head "Salary" income.