2017 (11) TMI 497

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....3. 2. Brief facts of the case qua the assessee are that the assessee filed its return of income on 01.02.2011 declaring total income of Rs. 10,88,600/- and the same was processed u/s.143(1) of the Act on 07.05.2011. Later on assessee's case was selected for scrutiny u/s.143(3) of the Act and the AO has completed the assessment by making the disallowance of Rs. 7,27,865/- on account of advance salary received. 3. Aggrieved from the order of AO, the assessee filed an appeal before the ld. CIT(A), who has confirmed the order passed by the AO observing the followings :- 5. I have considered the facts of the case. The assessing officer had added the sum of Rs. 7,27,865/- under section 17(1)(v) of the I.T. Act, 1961 as salary advance to the i....

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.... our attention towards the provisions of section 17 (2) (iii) (a) which reads as under: "SECTION 17: "Salary", "perquisite" and "profits in lieu of salary" defined. For the purposes of section s 15 and 16 and of this section,- (2) "perquisite" includes-................................... (iii) the value of any benefit or amenity granted or provided free of cost or at concessional rate in any of the following cases- (a) by a company to an employee who is a director thereof;" The Ld AR for the assessee also drew our attention towards Rule 3 (7) (i) of the Income Tax Rules, 1962 which reads as under: RULE 3 : Valuation of perquisites (7) In terms of provisions contained in sub-clause (viii) of clause (2) of section 17, the foll....