DEEPAK VERMA, J. - (1.) HEARD Sri M.V. Seshachala counsel for the Appellant and Sri G. Parthasarathi counsel for the Respondent.
(2.) THIS appeal is under Section 260A of the Income Tax Act, 1961, (hereinafter shall be referred to in short "the Act"), at the instance of the revenue, against the order passed by the Income Tax Appellate Tribunal. The appeal has been admitted on the following substantial questions of law: (1) Whether, on the facts and in the circumstances of the case, the Tribunal was correct, both on facts and in law, in holding that the reimbursement of club membership fees and allowance on furnishing etc. provided by the Assessee -company to their executives are not perquisites under Section 17(2) of the Act? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was correct, both on facts and in law, in holding that the Assessee cannot be treated as an Assessee in default under Section 201 of the Act for failure to deduct tax attributable on perquisite in respect of soft furnishings and reimbursement of club membership fees? The facts of the case in a nutshell are as under: The Assessee is a limited company which paid club fees on behalf of its executives, who are members of respective clubs, on account of the fact that they happen to be the executives of the company. According to the Assessee, corporate membership has been obtained by the company for the benefit of the Assessee and it is not a perquisite in the hands of the Assessees executives.
(3.) ACCORDING to the revenue, reimbursement by the Assessee of individual membership of clubs is clearly a perquisite within the meaning of Section 17(2) of the Act.;