Employee benefit taxation: suit given as a Christmas present taxed only at its value in the employee's hands.

A suit given by an employer to an employee as a Christmas present was taxable only on the value of the suit in the employee's hands, not on the employer's cost of obtaining it. The employee received a chattel, not a sum of money, and the employer's payment to the tailor merely discharged the employer's own liability. The taxable subject was therefore the money's worth received by the employee. Because the suit could be realised for money, its taxable value was the amount for which it could be sold when received, rather than the price paid by the employer.

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Issues: Whether a suit supplied by an employer as a Christmas present to an employee was taxable under Schedule E at the employer's cost or only at its value in the employee's hands.

Analysis: The employee did not become entitled to any sum of money from the employer or the tailor; what he received was a suit, and the employer's payment to the tailor discharged the employer's own liability. The taxable subject was therefore the money's worth received by the employee, not the expenditure incurred by the employer. Since the suit was a chattel capable of being realised for money, its taxable value was the amount for which it could be sold when received, rather than the price paid by the employer.

Conclusion: The employee was taxable only on the value of the suit in his hands, and not on the amount paid by the employer to obtain it.

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