Benefit or perquisite tax under section 2(24)(iv) fails where a routed loan and later debt write-off benefit relatives, not the assessee.

Section 2(24)(iv) taxes only a benefit or perquisite actually obtained by the assessee from the company, so a loan routed through relatives was not taxable as income merely because it was credited in the assessee's books. The write-off of the relatives' debts also could not be assessed in the assessee's hands, because any benefit arose to the relatives and, in any event, after the close of the relevant previous year. On that reasoning, the addition was deleted and the tax treatment failed in the assessee's hands.

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Issues: (i) Whether the amount of Rs. 4,00,000 routed through the assessee's relatives and credited in his books could be treated as the value of a benefit or perquisite from a company under section 2(24)(iv) of the Income-tax Act, 1961. (ii) Whether the post-year-end write-off of the relatives' debts could be assessed as the assessee's income for the relevant assessment year.

Issue (i): Whether the amount of Rs. 4,00,000 routed through the assessee's relatives and credited in his books could be treated as the value of a benefit or perquisite from a company under section 2(24)(iv) of the Income-tax Act, 1961.

Analysis: Section 2(24)(iv) taxes only the value of a benefit or perquisite actually obtained by a director or other specified person from the company. The assessee had merely received a loan and remained liable to repay the same amount. The benefit arising from the company's write-off of the relatives' debts accrued to the relatives, not to the assessee. A loan, even if routed through related persons, does not itself become income under section 2(24)(iv) unless the assessee obtains a real taxable benefit from the company. The distinction between deemed dividend under section 2(22)(e) and benefit or perquisite under section 2(24)(iv) was material, because the latter does not tax the loan amount itself.

Conclusion: The amount of Rs. 4,00,000 was not assessable as the assessee's income under section 2(24)(iv), and this issue was decided in favour of the assessee.

Issue (ii): Whether the post-year-end write-off of the relatives' debts could be assessed as the assessee's income for the relevant assessment year.

Analysis: The debts were written off on 30-4-1980, whereas the previous year ended on 31-3-1980. Since the alleged benefit, if any, arose after the close of the relevant previous year, it could not be brought to tax in the assessment year under consideration. The benefit, in any event, was attributable to the relatives whose debts were waived, and not to the assessee.

Conclusion: The write-off could not be taxed in the assessee's hands for the relevant assessment year, and this issue was decided in favour of the assessee.

Final Conclusion: The addition of Rs. 4,00,000 was deleted, and the assessee's appeal succeeded on the substantive tax issue.

Ratio Decidendi: For section 2(24)(iv), only the value of a benefit or perquisite actually obtained by the assessee from the company is taxable as income; a loan amount is not taxable as such, and a benefit accruing to a relative cannot be assessed in the assessee's hands absent a specific deeming provision.

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