TaxTMI 
TaxTMI 
TaxTMI 
1993 (8) TMI 130
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....he Secretariat, the Department of Agriculture, NABARD and Reserve Bank of India to coordinate the activities of the bank in implementing the various policy decisions of the Government. His duties include identifying factors hindering agricultural development in the area of operation of the concerned Agricultural Development Banks, identifying factors to overcome drought situation and boost agricultural activity. In the nature of the duties performed by him he had to tour the State exclusively. However, the bank did not provide him any conveyance. He himself borrowed from the bank and purchased a car which he had been using during the course of discharge of his official duties. He was entitled to reimbursement of 50 litres of petrol bills. He had submitted all petrol bills to the Bank for reimbursement. However, he was reimbursed only to the extent of 50 litres petrol every month. He is not in possession of any petrol bill now nor would it be possible for the bank to produce such petrol bills since there was time gap of more than 5 years by now. 3. For the accounting year relevant to assessment year 1988-89, the assessee submitted income-tax return disclosing only the income noted ....
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.... --------- Less : Expenses deductible under section 57 : Rs. i. Depreciation on car 21,166.20 ii. Interest paid on current a/c 647.10 &....
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....ase of the assessee that he received a sum of Rs. 8,400 from his employer bank towards hire charges for using his car for his official duties. He received a total of Rs. 8,400 per year. He wanted to depict the said receipt as income from other sources. From out of such income he seeks deduction of depreciation of Rs. 21,166.20 which represents depreciation of 20 per cent on Rs. 1,05,831, the actual cost of the car purchased by him and he paid a sum of Rs. 647.10 towards interest on the car loan taken by him. He seeks to claim both depreciation as well as interest paid on the car loan as deductible expenditure under section 57(3) of the Income-tax Act and according to the assessee it is his case that in the accounting year relevant to assessment year 1988-89 the ultimate income received by him under the other sources is a minus figure of Rs, 8,618.10. According to the assessee the working is as follows : "INCOME FROM OTHER SOURCES :  ....
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....p; on Rs. 1,05,831 21,166.20 3. Interest paid on current account 647.10 ----------- 21,813.30  ....
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....e by the bank. So also the terms of service under which the assessee is entitled for reimbursement for 50 litres of petrol every month is also not filed before this Tribunal. The assessee relied upon the following two decisions to buttress his case : (1) CIT v. Rajendra Prasad Moody [1978] 115 ITR 519 (SC) (2) CIT v. Smt. Archana R. Dhanwatay [1982] 136 ITR 355 (Bom.). While the Income-tax Officer, Ward 4(5), Hyderabad had completed the assessment under section 143(3) of the Income-tax Act by his order dated 21-12-1988 whereunder he had arrived at the total income of the assessee at Rs. 36,370. He had taken only Rs. 13,195 as income from other sources which comprises interest on National Savings Certificates of Rs. 12,570 and interest on bank deposits of Rs. 625. Having been aggrieved, the assessee went in appeal before the Dy. Commissioner (Appeals). It is claimed that the Income-tax Officer disallowed the claim of deduction of Rs. 12,570 towards depreciation and the interest of Rs. 647.10 on the loan taken for the purchase of the car, without assigning any reason whatsoever in the assessment order. The Dy. Commissioner (Appeals) also by his impugned order dated 30-3-1990 rejec....
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.... the bank used to reimburse only 50 litres. The question is whether such reimbursement can be termed as a benefit or a perquisite and whether it can be taken or considered as an item of income under section 2(24)(iiia) which is as follows : "any special allowance or benefit, other than perquisite included under sub-clause (iii), specifically granted to the assessee to meet expenses wholly, necessarily and exclusively for the performance of the duties of an officer or employment of profit;" 7. In CIT v. S.G. Pgnatale [1980] 124 ITR 391 the question which cropped up before the Gujarat High Court was whether living allowance received by a French national deputed by his employer company to work in India is of income nature or not in his hands. It was contended on behalf of the revenue that it was a perquisite in his hands. It has been held therein that living allowance cannot be considered to be either income of the assessee or it can partake the character of a perquisite. The Gujarat High Court following the principle laid down by the House of Lords in Owen v. Pook (Inspector of Taxes) [1969] 74 ITR 147 held that a perquisite is something which arises by reason of a personal advanta....
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....essee derives some income or offered income from the use of his car. Since there is no evidence at all worth the name to substantiate the plea that the assessee had derived Rs. 8,400 towards hire charges of the car paid by the bank and since reimbursement of petrol bills does not constitute any perquisite in the hands of the assessee, it cannot be considered to be income within the meaning of section 2(24)(iiia). I hold that the assessee is not entitled for either any depreciation claim of Rs. 21,166 or the interest amount of Rs. 647.10. 8. The two decisions relied on by the assessee, namely, Rajendra Prasad Moody's case and Smt. Archana R. Dhanwatay's case are clearly distinguishable. In Rajendra Prasad Moody's case with borrowed monies equity shares were purchased. In the year under consideration, no dividend income was received but the interest payable on monies borrowed were claimed as deduction under section 57(iii) of the Income-tax Act. The question was whether deduction under section 57(iii) is allowable only when income was earned under the head other sources as a result of the expenditure. The Hon'ble Supreme Court held that the section does not require that this purpose....