Tribunal: Tax paid by employee, not reimbursed by company, not part of income. Interest on deposit not a perquisite. Appeal dismissed.

The Tribunal held that the tax amount paid by the employee, which was not reimbursed by the company, should not be added to the employee's income. Additionally, notional interest on an interest-free deposit made for accommodation was not considered part of the employee's perquisite. The appeal was dismissed based on these findings.

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Issues:
1. Whether tax borne by the employee is part of the payRs.
2. Whether notional interest on interest-free deposit made for accommodation is part of perquisite of the assesseeRs.

Analysis:
1. The case involved the assessment year 1994-1995, where the respondent-assessee, an employee of a foreign company, had a tax equalization policy for his foreign assignment in India. The company was liable to reimburse the tax payable on the total salary received in India. The assessee included the tax reimbursement amount in the salary income declared for tax purposes. The ITAT found that the confusion arose because the assessee had paid tax but was entitled to reimbursement, leading to a discrepancy in the declared income. The Tribunal held that the tax amount paid by the assessee from the salary income, which was not reimbursed by the company, should not be added to the income of the assessee. Therefore, the first question regarding the tax borne by the employee not being part of the pay was dismissed.

2. Regarding the second question, the Tribunal allowed the claim of the assessee based on a previous court decision. The Tribunal followed the decision in the case of M.A.E. Paes v. CIT [1998] 230 ITR 60, which determined that notional interest on an interest-free deposit made for accommodation is not part of the perquisite of the assessee. As a result, the second question was also dismissed, and the appeal was accordingly rejected with no order as to costs.

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