Taxable perquisite from partner's personal use of business premises upheld under section 28(iv).

Occupation of part of business premises by a partner for personal residence was treated as a benefit or perquisite taxable under section 28(iv) of the Income-tax Act, 1961. Applying the earlier binding view, the court held that a partner's personal use of premises, even where the flat was also partly used for the firm's business, gives rise to taxable income in the form of a perquisite. The reference was answered in favour of the Revenue, and the assessee was held rightly assessable on the value of the benefit arising from such occupation.

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Issues: Whether the occupation of a portion of business premises by a partner for his personal residence constituted a benefit or perquisite taxable under section 28(iv) of the Income-tax Act, 1961.

Analysis: The question was answered by applying the earlier binding view that a benefit or perquisite arising from occupation of premises by a partner or director is includible in income under section 28(iv). The assessee's personal use of part of the flat, though the premises were also used partly for the firm's business, was treated as giving rise to a taxable perquisite.

Conclusion: The reference was answered in favour of the Revenue and against the assessee. The assessee was rightly assessed to tax on the value of the benefit or perquisite arising from occupation of the portion of the premises.

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