TaxTMI 
TaxTMI 
1977 (8) TMI 44
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....stion relates to the assessment year 1963-64, the relevant accounting year being the year ended 31st March,1963, and it arises out of these facts: Assessee, Shri Ramnath A. Podar, an individual, is a director of M/s. Podar Sons Pvt. Ltd., which company is the managing agent of certain textile mills. During the accounting year relevant for the assessment year in question as well as in the accounting year for 1958-59 assessment, the assessee went abroad for exploring the possibility of further exports. The company met the assessee's expenditure for both the years. It appears that the assessee persuaded the board of the company to meet the expenditure of his wife who accompanied him on both the occasions. The resolution passed by the company's....
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....e foreign tour expenses of the assessee's wife, she at any rate derived some benefit, but there was nothing in section 2(24)(iv) by which the income of a relative of a director was by legal fiction to be treated as the income of the director himself. The Tribunal, therefore, reversed the view taken by the taxing authorities below and held that the sum of Rs. 10,662 was not assessable in the assessee's hands. At the instance of the Commissioner of Income-tax the question set out at the commencement of the judgment has been referred to us for our opinion. I Since on the facts there is no dispute between the parties, the question really turns upon the proper interpretation of the definition of the expression " income " as given in section 2(24....
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.... income of the relative of the director or of such person having a substantial interest in the company, and that would be the proper scope of the definition section and on a reading of the entire provision there does not appear to be any warrant to construe the value of any benefit or perquisite received by the director's relative or the relative of a person having a substantial interest in the company as the income of the director or of such person having substantial interest in the company. Unless, therefore, there is some legal fiction or a deeming provision by which the value of such benefit or perquisite received by a relative of the director or by a relative of a person having a substantial interest in the company is to be regarded as....