Section 15, read with sections 10(10CC) and 17(2) of the Income-tax Act, 1961

Court :
IN THE ITAT DELHI BENCH ‘C’

Brief :
Section 15, read with sections 10(10CC) and 17(2) of the Income-tax Act, 1961 - Salaries - Chargeable as - Assessment year 2003-04 section 10(10CC) of the Income-tax Act, 1961 - Tax on perquisites met by employer - Exemption to - Whether where employer of assessee has paid to him ‘net to tax salary’, assessee cannot claim benefit of exemption under section 10(10CC) on ground that phrase ‘not provided for by way of monetary payment’ as occurring in section 10(10CC) is only in relation to employee and it applies only when payment is made to employee directly and any indirect payment made to others, viz., Government in this case, would not be a case of perquisite provided for by way of monetary payment - Held, yes Words and phrases : Phrase ‘not provided for by way of monetary payment’ as appearing in section 10(10CC) of the Income-tax Act, 1961 Facts The assessee, a foreign technician, was in service of an Indian Company (employer). The employer paid salary to the assessee ‘net of tax’. The assessee claimed that the tax paid by the employer on his behalf was a perquisite not provided for by way of monetary payment and, therefore, tax on such perquisite was exempt under section 10(10CC); that once the tax on the tax payable was exempt, multi-stage grossing up was not required; and that, therefore, the salary paid by the employer to him was to be determined after single stage grossing up of taxes. The Assessing Officer did not accept the plea of the assessee that only single stage grossing up was to be done in view of the provisions contained in section 10(10CC). The Assessing Officer, therefore, restored to multi-stage grossing up in order to determine the taxable salary of the assessee. On appeal, the Commissioner (Appeals), confirmed the decision of the Assessing Officer determining the taxable salary after multi-stage grossing up. On second appeal :

Citation :
Western Geo International Ltd. v. Assistant Commissioner of Income-tax, Circle I, Dehradun