TaxTMI 
TaxTMI 
1984 (8) TMI 113
X X X X Extracts X X X X
X X X X Extracts X X X X
....is covered under the provisions of section 2(24)(iv) of the Income-tax Act, 1961. 3. The Tribunal is also requested to adjudicate on the point whether the benefit arising out of interest-free loan is a perquisite within the meaning of section 17(2)(iii) of the Income-tax Act, 1961 as this point remains to be decided vide Tribunal's order in IT Appeal Nos. 928 to 931 (Chd.) of 1975-76 dated 31-3-1977. 4. It is prayed that the order of the Commissioner (Appeals) be set aside and that of the ITO restored. 3. The facts briefly stated are like this. The assessee, Shri Surinder Chand Banta (the assessee), is an employee of Vicks Products Inc. (VPI) and derives income from salary and dividends. VPI in India is a branch of Vicks Products Inc., New York, USA, VPI, USA is stated to be hundred per cent subsidiary of Richardson Marral Inc., New York (RMI). In 1963, RMI obtained permission from the Government of India to form a new company under the name and style of Richardson Hindustan Co. Ltd. (RHL), with a share capital of Rs. 15 lakhs divided into five lakh shares of the face value of Rs. 10 per share. The Government of India allowed RMI to take 50 per cent of the total shareholdi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he value of the perquisites on account of interest-free loans as under : Assessment year Value Rs. 1971-72 30,150 1972-73 23,680 1973-74 24,000 &....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd raised by the revenue reads as under : "3. In pursuance of the above directions of the Income-tax Appellate Tribunal, Chandigarh Bench, Chandigarh, the hearing of these appeals was fixed when Shri P.C. Mehra, Chartered Accountant appeared on behalf of the appellant. Shri Mehra contended that the provisions of section 2(24)(iv) do not apply in the case of the appellant since the provisions only apply to a director of a company or a person who has a substantial interest in the company or by the relative of the director or such person. It was contended by Shri Mehra that the appellant Shri S.C. Banta was neither a director nor was a relative of any director or any person having substantial interest in the company. It was contended that Shri Banta did not have any shares in Vicks Products Inc. nor was related to any director or a person having substantial interest in terms of the definition contained in section 2(32) and 2(41) of the Income-tax, Act 1961. These contentions of Shri Mehra have a great deal of force and I, therefore, hold that the interest-free loan granted by Vicks Products Inc. is not a benefit in the hands of the appellant within the meaning of section 2(24)(iv) ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....al interest in the company. 2. the sum is paid by the company in respect of any obligation which but for such payment would have been payable by the director or by the person who has substantial interest in the company. 10. In the case before us, the Commissioner (Appeals) has recorded a finding that the assessee was neither a director nor a person holding substantial interest nor a relative of the director or of such other person. The revenue has not brought any evidence to show that he was one of the above categories of persons. That being the position, we are of the opinion that provisions of section 2(24)(iv) are not attracted in this case. There is no material before us to record a finding with regard to the second condition. At any rate, finding to the second condition will only be academic so long as the first condition is not fulfilled. The contention by the learned departmental representative that the assessee was sole representative of the American company in India which floated RHL and, therefore, was covered under section 2(24)(iv) in our opinion, deserves to be rejected. We have already said earlier that the revenue has miserably failed to bring any evidence on r....