1984 (8) TMI 72

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....red by JAGANNATHA SHETTY J.-This is a reference under s. 256(1) of the I.T. Act, 1961. The question referred by the Income-tax Appellate Tribunal, Bangalore Bench, reads: "Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in holding that the premium paid on personal accident insurance policies of its employees should not be treated as a perquisite for t....

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....al accident was between the assessee-company and the insurance company and the amounts under the policy were payable to the assessee-company and, therefore, the premia paid under the policy should not be taken as perquisites for purposes of s. 40A(5), Explanation 2. Aggrieved by the order of the AAC the Department preferred an appeal before the Tribunal. The Tribunal took the same line of reaso....

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....yee or to effect a contract for an annuity. Clause (iv) envisages payment by the assessee of any sum under an obligation which, but for such payment, would have been payable by the employee. It means, if payment had not been made by the employer, it has to be paid by the employee. The substance of clause (v) is also the same. It must also be a payment by the assessee of any sum to effect an ass....

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....rt in CIT v. Russel [1964] 53 ITR 91, while considering the provisions of s. 7(1) of the Indian I.T. Act, 1922, which is similar to s. 17(2) of the 1961 Act, observed at page 97: "It implies that a right is conferred on the employee in respect of those perquisites. One cannot be said to allow a perquisite to an employee if the employee has no right to the same. It cannot apply to contingent pay....