Commissioner of Income Tax vs Seth Madan Lal Modi

This is an Income Tax Reference u/s 256 of the Income Tax Act, in which two questions have been referred to this court for its opinion :

"1. Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was justified both on facts and in law in holding the perquisite value in respect of accommodation in Modi Bhavan at Rs. 2,911 as against Rs. 10,000 adopted by the Income Tax Officer?

Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was justified both on facts and in law in holding that the sum of Rs. 12,952 representing remuneration from Modipon Ltd. was not taxable by ignoring the material fact that there was a resolution in this regard for payment of such remuneration?"

The first question referred is covered by a decision of Delhi High Court in Commissioner of Income Tax Vs. Smt. Dayawati Modi, . We respectfully agree with the decision of the Delhi High Court and decide the first question in favour of the assessee.

As regards second question, the finding (in Para 6 of the Tribunal order) is that the assessee did not receive any remuneration. Hence this question is also answered in favour of the assessee.

Thus, the reference is answered in affirmative, i.e., in favour of the assessee and against the department.