Tax treatment of employer-provided rent-free residence: not chargeable as income where no money's worth or convertible benefit exists.

Employer provision of a rent-free residence does not create assessable income where no monetary receipt or benefit convertible into money arises; the annual value machinery for property does not operate to tax a servant's occupation lacking proprietary rights; personal saving of an expense is not treated as income absent something tangible or convertible into money. The operative effect is that such occupation is not included in total income for statutory abatement and is not chargeable under the property, profit, or employment schedules considered.

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Issues: Whether the value of a rent free residence provided by an employer to an employee (bank agent) is to be included in "total income from all sources" for income tax assessment and abatement purposes, i.e., whether such occupation is chargeable under Schedule A, Schedule D, or Schedule E of the Income Tax Code.

Analysis: The Court examined the Income Tax Code framework distinguishing (i) Schedule A (annual value of property and occupation), (ii) Schedule D (profits and gains), and (iii) Schedule E (salaries, wages, perquisites and emoluments). The reasoning emphasised that income tax under Schedules D and E is a tax on actual receipts or amounts convertible into money. The Court considered whether the rent free residence amounted to a money payment or to something capable of being turned into money (money's worth). It also noted that Schedule A provides machinery to assess annual value of property and that a servant's occupation provided by an employer does not confer proprietary rights or an assessable annual value on the servant. The Court rejected treating personal saving of expense (being saved from paying rent) as a receipt constituting income where nothing tangible convertible into money is received.

Conclusion: The Court concluded that the appellant's occupation of the bank house rent free is not assessable as income under Schedule A, D, or E because it does not constitute a receipt or benefit convertible into money; accordingly it is not to be included in "total income from all sources" for the purpose of the statutory abatement. The decision is in favour of the assessee.

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