COMMISSIONER OF INCOME TAX Vs. KASLIWAL R L

JUDGEMENT

(1.) THE Income-tax Appellate Tribunal has referred the following question of law arising out of its order dated April 23, 1981, in respect of the assessment year 1976-77 :

(2.) THE relevant facts of the case are that the assessee is a partner of a firm, Messrs. Gem Palace, Jaipur. THE firm had taken on lease Bairathi Bhawan at M. I. Road, Jaipur. THE premises were remodelled at the cost of Rs. 1,98,890 up to Diwali, 1976. One-third of the premises is occupied by the assessee which is free of rent. THE assessee offered to the Income-tax Officer an amount of Rs. 4,000 to be assessed in his hands on this account. THE Income-tax Officer did not accept this amount offered and included the benefit in the hands of the assessee at Rs. 9,000. THE reason was that in the previous year, though the figure of Rs. 4,000 was taken because of renovations and investment of around Rs. 2 lakhs, which were spent by the firm, this amount was increased to Rs. 9,000.

(3.) THE only condition which is required to be fulfilled for charging the income under the section is that it should arise from business or profession. In the present case, it is arising from the business carried on by the firm. It cannot be denied that it was not a benefit or perquisite and, therefore, bad to be converted into money. THE Income-tax Officer has to assess the value. THE assessee himself has offered the amount of Rs. 4,000 and he was assessed previously on the said figxire. It was increased by the Income-tax Officer to a sum of Rs. 9,000 on the ground that it was a substantial amount by way of remodelling. Approximately, the amount of Rs. 2 lakhs was invested by the firm. THE value of the perquisite was increased to Rs. 9,000 from Rs. 4,000. THE Appellate Assistant Commissioner as well as the Income-tax Appellate Tribunal have seriously erred in saying that the provisions of law under which it could be taxed has not been mentioned. THE authorities are expected to know the law and .even if, for any reason, the provision has not been mentioned in the assessment order, it was their duty to consider the provisions of the Act, more particularly when, in the assessment order, it was mentioned that it is an advantage derived by the assessee from the firm, Messrs. Gem Palace, which was estimated at a figure of Rs. 9,000 and for which the reason was also given in the assessment order.