Calcutta H.C : Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding not to gross up the salaries on tax on tax basis for the purpose of inclusion of the tax as perquisites in the hands of the assessee ?

Counsel Appeared

Sunil Mukherji, for the Revenue : R.N. Datta, for the Assessee

DIPAK KUMAR SEN, J.:

On an application of the Revenue under s. 256(1) of the IT Act, 1961, the following questions have been referred by the Tribunal as questions of law arising out of its order for the opinion of this Court:

” 1. Whether, on the facts and in the circumstances of the case and having regard to the terms and conditions of the agreement dated August 31, 1966, between M/s Monte Catini Edison, S.P.A., Italy, and the Fertilizer Corporation of India Ltd., the Tribunal was right in holding that the assessee served in India not as an employee of the Fertilizer Corporation of India Ltd., but in the capacity of an employee of M/s Monte Catini Edison, S.P.A. ?

2. If the answer to question No. 11 is in the affirmative, then whether, on the facts and in the circumstances of the case, the Tribunal was right in holding not to gross up the salaries on tax on tax basis for the purpose of inclusion of the tax as perquisite in the hands of the assessee ? “

2. We correct question No. 2 as follows: ” Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding not to gross up the salaries on tax on tax basis for the purpose of inclusion of the tax as perquisites in the hands of the assessee ? “

3. The controversies raised in the question are covered by a decision of this Court in N. Sciandra vs. CIT (1979) 118 ITR 675. Following the said decision, we answer both the questions in the affirmative and in favour of the assessee.

4. There will be no order as to costs.

SHYAMAL KUMAR SEN, J.:

I agree.

[Citation : 172 ITR 451]