R.P. Garg, Accountant Member - (1.) THIS is an appeal by the revenue against the order of the CIT(A), for the assessment year 1982-83.
(2.) The short question involved in this appeal is as to what would be the value of food taken by the assessee in a hotel, the cost of which was borne by the employer, Banque Indosuez. For the period from 1-4-1981 to 31-3-1982, the food charges were Rs. 62,208. The ITO brought this amount to tax as expenses on food provided to the assessee, in his opinion, would be perquisites assessable in the hands of the assessee. The CIT(A) reduced the addition to Rs. 13,000, adopting the value of the perquisites @ Rs. 2,000 per month for the period from 21-9-1981 to 31-3-1982, as the food expenses for the period prior to 21-9-1981 could not, in his opinion, be treated as perquisites. He, therefore, directed the ITO to delete the addition of Rs. 49,208 from the assessment of the assessee. The revenue is aggrieved and submitted that the reimbursement of food expenses incurred in a hotel by the assessee would be taxable income. For this purpose, he relied upon the decision of the Tribunal in the case of Earl W. Tallent v. Second ITO [1987] 20 ITD 512 (Bom.). The amount of expenses, he submitted, was ascertained and known and was actually paid by the employer and, therefore, the entire amount of expenditure would be perquisites and that there was no scope of limiting the value to Rs. 2,000 per month. When the assessee was working in India throughout the year, he submitted, there was no question of bifurcating the value of the perquisites on the basis of the cut-off date, namely, 21-9-1981, the day on which the Indian Branch of the assessee's employer-bank was opened.
(3.) THE learned counsel for the assessee, on the other hand, submitted that up to 21-9-1981, the assessee was visiting India and there was no relationship of employer-employee vis-a-vis the Indian branch. He referred to the decision of the Allahabad High Court in CIT v. Lakshmipat Singhania [1973] 92 ITR 598 ; that of the Gujarat High Court in CIT v. S.G.Pgnatale [1980] 124 ITR391 and that of the Calcutta High Court in N. Sciandra v. CIT [1979] 118 ITR 675. For the period after 21-9-1981 also, he submitted, there could be no perquisite in view of the decision of the Bombay High Court in CIT v. D.R. Phatak [1975] 99 ITR 14 at 23. He further submitted that the facility provided to the assessee was not convertible into money and, therefore, not chargeable to tax and in this connection, he referred to the decision in the case of Wilkins (H.M. Inspector of Taxes) v. Rogerson 39 Tax Cases 344 (Ch.D.) and that of House of Lords in the case of Heaten (H.M. Inspector of Taxes) v. Bell 46 Tax Cases 211, with particular reference to pages 246-7,255,258 and 265. He then referred to the decision of the Gujarat High Court in the case of Acharya D.V. Pande v. CIT [1965] 56 ITR 152 at 165-172 and that of the Patna High Court in CIT v. S.P. Jain [1967] 65 ITR 416 at 418. In any case, he submitted, that the value of food which the employee could get on its sale, i.e., as a second hand price, alone could be added and that being 'nil' in case of food served, no perquisite value could be added. It was further submitted that the value adopted by the CIT(A) was fair and reasonable and no interference is called for. THE learned Departmental Representative, in reply, objected to the assessee's raising the non-taxability oT perquisite, in the absence of either any cross-objection or cross-appeal and also referred to the decision of the Bombay High Court in the case of Bombay Burmah Trading Corporation Ltd. v. CIT [1984] 145 ITR 793 and submitted that it is the actual amount which was to be taxed.;