1980 (11) TMI 15

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....and of rule 3(c)(ii) of the Income-tax Rules, 1962, the Appellate Tribunal was justified in holding that the value of the perquisite of free car provided to the employees, should be Rs. 150 per month in respect of each employee to whom the free use of the assessee's car was provided ? " This reference, at the instance of the Commissioner of Income-tax, West Bengal-IV, Calcutta, under s. 256(1) of the I.T. Act, 1961, relates to the assessment year 1966-67. For this assessment year, the assessee, which is a limited company, claimed that the value of the perquisite of free car provided to the employees should be worked out under r. 6D of the I.T. Rules, 1962. The ITO, however, did not agree with the assessee-company and, instead, held that ....

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....nd there was, therefore, no material in support of the ITO's estimate that 50 per cent. of the expenses relating to the maintenance and running of the car were for the personal use of the employees. In the above circumstances, the Appellate Tribunal held that since under r. 3 of the I.T. Rules, 1962, the value of the perquisite of the free car provided to the employees for the purpose of assessment under the head " Salaries" would be Rs. 150 per month, the value of the perquisite in the hands of the employer, that is, the assessee-company, for the purpose of the ceiling under s. 40(c)(iii) should also be taken at the same amount, that is, Rs. 150 per month per employee. It is submitted on behalf of the revenue, in this case, that both th....

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.... no material in support of the contentions made by the department that the cars were allotted to the employees exclusively for their fulltime use. It was also found by the ITO in a roundabout way that the car was used both for the business purpose and for the personal use of the employees because he himself had estimated half of the expenses on maintenance and running of the cars as perquisite of the employees. There would have been some merit in the contention of the department had there been material on record to show what was the total use of the cars and what was the use of the car relating to the personal work of the employees. Naturally, it was rightly found by the Tribunal that there was no material in support of the ITO's estimate t....