TaxTMI 
TaxTMI 
1998 (9) TMI 55
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....he applicant has to be grossed up on 'tax on tax basis' and not on simple tax basis as envisaged under section 17(2) of the Income-tax Act, 1961 ?" The reference has been made at the instance of the assessee relating to the assessment year 1984-85. Shortly stated the facts are : The assessee in this case is a foreigner who worked as a technical advisor to Yuken India Ltd., Bangalore. As per the terms of his employment, he was to be paid a fixed amount of net salary and the tax component was to be borne by his employer. The employer paid income-tax of Rs. 34,306 on behalf of the assessee. The Income-tax Officer framed the assessment and determined the taxable income at Rs. 83,554. The Income-tax Officer made the calculations as under w....
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....4 Furniture perquisite at Rs. 1,856 per year for six months 928 Profession tax 120 Gas, water and electricity perquisites at Rs. 500 per month 2,871 Servant allowance at Rs. 250 per month &....
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....bsp; ------ Taxable income 83,554 &....
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....al. The assessee thereafter filed an application under section 256(1) of the Act requesting the Tribunal to refer the questions of law arising from its order to this court for its opinion. Acceding to the request of the assessee, the Tribunal referred the question of law reproduced in the earlier part of this judgment to this court for its opinion. It was conceded before the Tribunal as well as before us by the assessee that the amount of Rs. 34,306 constituted perquisite received by the assessee. It is contended by counsel for the assessee that the amount of tax alone should be added to the amount of net salary received by the assessee. The assessee objected to the procedure of computing the gross salary on the basis of the principle of....
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....other perquisites before arriving at the taxable income of the assessee. The contention of counsel for the assessee that if the net taxable income is arrived at after adding the perquisite of the tax paid by the employer for the purpose of taxation then, it would amount to tax on tax is fallacious. It is a fallacy to call it tax on tax. In fact and substance, tax paid by the employer is the perquisite given to the employee which has to be added to the salary of the employee like other perquisites and then calculate the tax subject to any admissible deductions in law. In Tokyo Shibaura Electric Co. Ltd.'s case [1964] 52 ITR 283 the Mysore High Court to which this court is a successor court arrived at the same conclusion at which we have a....