1998 (6) TMI 61 - HC - Income Tax

High Court rules in favor of assessee on remittance inclusion under Income-tax Act, 1961.

The High Court ruled in favor of the assessee in a case concerning the interpretation of remittance inclusion in income under the Income-tax Act, 1961. ... Income, Service Rendered, Salary, Perquisite Issues:1. Interpretation of remittance inclusion in income under Income-tax Act, 1961.2. Treatment of housing and motor car expenses as perquisites.Interpretation of Remittance Inclusion:The High Court considered whether a remittance of Rs. 1,47,750 should be included in the assessee's income under sections 9 and 16 of the Income-tax Act, 1961. The Revenue argued that an Explanation added to section 9(1)(ii) should have retrospective effect, declaring that income for services rendered in India should be regarded as income earned in India. However, the court referred to previous cases and held that the Explanation cannot be applied retrospectively. The court cited a similar case in Kerala where it was held that the Explanation added in 1983 cannot apply to periods before April 1, 1979. Consequently, the court decided in favor of the assessee, ruling against the Revenue.Treatment of Housing and Motor Car Expenses:The court also analyzed whether the housing and motor car expenses of the assessee should be treated as perquisites. Referring to previous judgments, the court noted that the expenses should not be considered as perquisites. Citing a case from 1980 and another from 1997, the court concluded that the second question should be decided against the Revenue and in favor of the assessee. Therefore, both questions were answered in the negative, ruling in favor of the assessee and against the Revenue. The court disposed of the reference without any order as to costs.