Director benefits from company taxable as income without salary linkage or enforceable right under the 1922 tax provision.

Value of rent-free accommodation and other benefits provided by a company to its director was held taxable as income under section 2(6C)(iii) of the Indian Income-tax Act, 1922. The provision treated as income any benefit or perquisite obtained from a company by a director, whether convertible into money or not. The court held that no further requirement of salary linkage or an enforceable right was necessary; once the director received the benefit from the company, the statutory condition was satisfied. The question was answered in the affirmative, against the assessee and in favour of the Revenue.

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Issues: Whether the value of rent-free accommodation and other benefits provided by a company to its director constituted income under section 2(6C)(iii) of the Indian Income-tax Act, 1922.

Analysis: Clause (iii) of section 2(6C) treated as income the value of any benefit or perquisite, whether convertible into money or not, obtained from a company by a director. The accommodation provided was a benefit, and the assessee was admittedly a director of the company providing it. The provision did not require that the benefit be received only as salary or under an enforceable right. Once a director receives such benefit from the company, the statutory condition is satisfied and the value becomes taxable as his income.

Conclusion: The value of the rent-free accommodation and related benefits was income of the assessee and the question was answered in the affirmative, against the assessee and in favour of the Revenue.

Ratio Decidendi: Under section 2(6C)(iii) of the Indian Income-tax Act, 1922, any benefit or perquisite obtained by a director from the company is deemed income, and no further requirement of salary linkage or enforceable right is necessary.

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