Substantial interest controls taxability of company car benefit in individual assessment under the Income-tax Act, 1922.

A company-provided car benefit could not be brought to tax in the managing agent's individual assessment under section 2(6C)(iii) of the Indian Income-tax Act, 1922, because the charging definition applied only where the recipient had substantial interest in the company. On the facts, the assessee had no such substantial interest and was not shown to be a relative of a person who did. Since the statutory condition for invoking the provision was absent, the benefit could not be included in the individual assessment, and there was no need to examine whether the benefit was otherwise unauthorised.

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Issues: Whether the value of the car benefit provided by the company could be included in the managing agent's individual assessment under section 2(6C)(iii) of the Indian Income-tax Act, 1922, when he did not have substantial interest in the company.

Analysis: The relevant charging definition applied only where the recipient of the benefit or perquisite had substantial interest in the company. On the facts found, the assessee did not hold such substantial interest and was not shown to be a relative of a person who did. In that situation, the statutory condition for invoking the provision was absent, and it was unnecessary to examine whether an unauthorised benefit otherwise fell within the clause.

Conclusion: The addition in the assessee's individual assessment was not sustainable, as the statutory requirement of substantial interest was not satisfied.

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