| The Tax Publishers2019 TaxPub(DT) 7771 (Del-Trib) INCOME TAX ACT, 1961
Section 17(2)(v)
When there was an agreement between Indian and Australian companies as regards to reimbursement of foreign currency part of salary for administrative convenience and both the parties agreed upon terms and conditions of scheme to enable the assessee to receive a part of the remuneration in his home country, then subsequent application of such salary by the foreign company to discharge its legal obligation, if any, did not bind either Indian company or the assessee in any manner. As the said agreement nowhere referred to any payment towards superannuation guarantee scheme and also there were no evidence to suggest that the Indian company had indeed contributed to the so-called scheme, AO had rightly made additions by treating said contributions as perquisites under section 17(2)(v).
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Salary - Perquisite under section 17(2) - Contribution paid by employer towards superannuation fund and towards health insurance premium -
Assessee's employer Amway India had entered into an agreement with Amway Australia, whereby for administrative convenience, at the request and on behalf of Amway India, Amway Australia shall pay his salary amounts in his home country. AO made additions on account of contribution paid by employer towards superannuation fund and towards health insurance premium by treating said contributions as perquisites under section 17(2)(v). Assessee contended that benefits would accrue only on attaining particular age, etc., hence there was no right to receive such amount during the year, thus said contribution would not be taxable. However, Revenue contended that the employee had got vested right in the fund as soon as the contribution was made to the fund. Held: In the instant case, employer of the assessee had an agreement with Australian enterprise to transmit the foreign currency payment for administrative convenience. Such agreement nowhere referred to any payment towards superannuation guarantee scheme and also there were no evidence to suggest that the Indian company had indeed contributed to the so-called scheme. Therefore, if the Australian company remitted the amounts to the scheme, the same was done on its own volition and the assessee also must be on the rolls of that concern. Moreover, from the reading of various terms and conditions, it was evident that the said payment did not represent contributions to Superannuation Fund and for certain the employer of the assessee had not made any such payments. Thus, as the Indian employer had not contributed to any fund on behalf of the assessee, AO had rightly made additions on account of contribution paid by employer towards superannuation fund and towards health insurance premium by treating said contributions as perquisites under section 17(2)(v).
REFERRED : L.W Russel (1964) 53 ITR 91 (SC) : 1964 TaxPub(DT) 0315 (SC), NKS Lal (1994) 208 ITR 14 (Guj: 1994 TaxPub(DT) 0432 (Guj-HC), T. Adashi (2006) 100 TTJ 332 (Del) : 2006 TaxPub(DT) 1047 (Del-Trib), Pramod Bhasin (2006) 8 SOT 72 (Del) : 2006 TaxPub(DT) 1244 (Del-Trib)
FAVOUR : Against the assessee
A.Y. : 2004-05, 2006-07
 IN THE ITAT, D BENCH, NEW DELHI
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