- (1.) These appeals are preferred by the revenue against the decision of the Madras High Court. The question that was referred by the Tribunal u/s. 66(1) of the Indian Income-tax Act, 1922 was : Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in deleting the additions made u/s. 2(6C)(iii) of the Indian IT Act, 1922, and u/s. 40(c) of the Income-tax Act, 1961
(2.) The assessee was the managing agent of a particular company. The company had provided him a car which he used for his private purposes also. Applying the provisions of sec. 2(6C)(iii) of the 1922 Act, the ITO disallowed certain amount from the assessment of the company. Therefore, the ITO concerned with the individual assessment of the managing agent added that amount in his individual assessment. The question arose whether the said addition can be made in the individual assessment of the managing agent.
(3.) The question has to be answered with reference to definition of income in sec. 2(6C) of the Indian Income-tax Act, 1922. The definition includes several items. The only sub-clause which is relevant for the present purpose is sub-clause (iii) which reads thus : income includes ** ** ** (iii) the value of any benefit or perquisite, whether convertible into money or not, obtained from a company either by a director or by any other person who has substantial interest in the company (that is to say who is concerned in the management of the business of the company, being the beneficial owner of shares, not being shares entitled to a fixed rate of dividend whether with or without a right to participate in profits, carrying not less than twenty per cent of the voting power), 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 ;;