TaxTMI 
TaxTMI 
1993 (7) TMI 19
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....tion 2(24)(iv) of the Income-tax Act, 1961, in the computation of total income of the assessee ?" For the assessment year 1972-73, the assessee filed a return of income disclosing a total income of Rs. 81,289. The assessment was completed on March 10, 1975. Later on, the Income-tax Officer, during the course of assessment of Messrs. Karamchand Premchand Pvt. Ltd., came to know that the said company had incurred expenditure on the foreign tours of one of its directors, Gautam Sarabhai, and his wife, Smt. Kamalini, the assessee. He also noticed that for the tour of Smt. Kamalini, the company had expended Rs. 39,753. In view of this information, the Income-tax Officer reopened the assessment and ultimately included the said amount of Rs. 39....
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....assessee had not gone abroad for the business purpose of the company. He submitted that this finding has not been disturbed by the Tribunal. The Tribunal has allowed the appeal because it was of the view that the benefit or perquisite was not obtained by the assessee inasmuch as it was not possible to say that she had made any attempt to procure the same. Thus, the finding that she had received benefit as the said foreign tour was not undertaken for the business purpose of the company has not been upset by the Tribunal and no question as regards that finding of fact has been referred to this court and, therefore, it is not open to us to consider whether she derived any benefit or not. In our opinion, this contention is really misconceive....
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....fied in this case. It was also submitted that we should not interpret this provision in a manner which would result in avoidance of tax. Section 2(24) defines the term "income". It is an inclusive definition and clause (iv) of that definition reads as under : "the value of any benefit or perquisite, whether convertible into money or not, obtained from a company either by a director or by a person who has a substantial interest in the company, or by a relative of the director or such person, and any sum paid by any such company in respect of any obligation which, but for such payment, would have been payable by the director or other person aforesaid." The first part of clause (iv) refers to any benefit or perquisite obtained from a ....
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....age, profit or gain. Moreover, the word "benefit" occurs in a provision which treats the benefit given by a company as income of the person who can be said to have obtained it, with the result that it would become taxable in his hands. Considering all these aspects, we are of the opinion that the word "benefit" occurring in clause (iv) would mean "any advantage, gain or improvement in condition" and only if such a thing is obtained by an assessee from a company and if the other conditions are satisfied, then and then only can the value of it be treated as his income. The material on record discloses that earlier also, the assessee had gone on foreign tours. Though it is not clear on how many occasions she had gone along with her husband ....