Necessary boarding for foreign technicians is not a taxable perquisite, and grossing up of tax perquisite was disallowed.

Accommodation and boarding provided to foreign technicians as a necessity for performing assigned duties was not taxable as a perquisite, and no addition was justified on that basis. Following its consistent view on similar facts, the Tribunal also held that there was no legal basis for grossing up the tax perquisite. Both issues were decided in favour of the assessees, and the appeals succeeded in full.

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Issues: (i) Whether the value of boarding provided to foreign technicians was taxable as a perquisite or as income from other sources. (ii) Whether there was scope for grossing up of tax perquisite in the assessees' cases.

Issue (i): Whether the value of boarding provided to foreign technicians was taxable as a perquisite or as income from other sources.

Analysis: The accommodation was found to be provided ex necessitate for discharge of the duties assigned. On that basis, it could not be treated as a perquisite and no addition was warranted on that account.

Conclusion: The addition on account of the perquisite value of boarding was deleted in favour of the assessee.

Issue (ii): Whether there was scope for grossing up of tax perquisite in the assessees' cases.

Analysis: On similar facts, the Tribunal had consistently held that there was no scope for grossing up. Following that line of authority, the Tribunal rejected the Revenue's stand.

Conclusion: There was no scope for grossing up of tax perquisite, and the ground was allowed in favour of the assessee.

Final Conclusion: The common issues were decided in favour of the assessees, and the appeals succeeded in full.

Ratio Decidendi: Accommodation provided as a necessity for performance of duties is not a taxable perquisite, and where no legal basis exists for grossing up, tax perquisite cannot be enhanced by that method.

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