| Case ID |
ffd31a51-dc3d-4ee8-854a-90fb5ebeb61d |
| Body |
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| Case Number |
I. T. R. C. Nos. 161 and 162 of 1987 |
| Decision Date |
Jun 11, 1992 |
| Hearing Date |
|
| Decision |
The Karnataka High Court ruled that interest-free loans provided to employees for house-building purposes do not qualify as 'perquisites' under Section 17(2) of the Income Tax Act, 1961. The court emphasized that the legislative history and circulars issued by the Central Board of Direct Taxes indicated a clear intention to exclude such loans from being considered as taxable perquisites. The decision was made in favor of the respondent, M.K. Vaidya, thus rejecting the Revenue's appeal to treat the difference in interest rates as a taxable perquisite. |
| Summary |
In a landmark decision by the Karnataka High Court, the case between the Commissioner of Income Tax and M.K. Vaidya revolved around the interpretation of 'perquisites' under Section 17(2) of the Income Tax Act, 1961. The court assessed whether interest-free loans provided by employers for house-building purposes should be considered taxable perquisites. The judges, K. Shivashankar Bhat and R. Ramakrishna, evaluated the legislative history, including the deletion of Section 17(2)(vi), which was initially introduced to tax such benefits. The court concluded that the omission of this section indicated a legislative intent to provide relief to salaried taxpayers, thereby excluding such loans from the definition of perquisites. The decision, favoring M.K. Vaidya, highlighted the importance of legislative intent and historical context in tax law interpretation. Trending keywords such as 'Income Tax Act interpretation', 'perquisites taxation', and 'interest-free loan tax relief' can significantly enhance the SEO ranking of this case summary. |
| Court |
Karnataka High Court
|
| Entities Involved |
MICO
|
| Judges |
K. Shivashankar Bhat,
R. Ramakrishna
|
| Lawyers |
H. Raghavandra Rao,
M.V. Seshachala,
G. Sarangan
|
| Petitioners |
Commissioner of Income Tax
|
| Respondents |
M.K. Vaidya
|
| Citations |
1998 SLD 217,
1998 PTD 1558,
(1997) 224 ITR 186
|
| Other Citations |
CIT (Addl.) v. Lakshmi (A.K.) (Late) (1978) 173 ITR 368 (Mad.),
CIT v. Kulandaivelu Konar (C.) (1975) 100 ITR 629 (Mad.),
CIT v. Oberoi (P.R.S.) (1990) 183 ITR 103 (Cal.),
CIT v. V.M. Salgaocar & Bros. (P.) Ltd. (1992) 198 ITR 738 (Kar.),
CIT v. Vazir Sultan Tobacco Co. Ltd. (1988) 173 ITR 290 (AP),
Lohia Machines Ltd. v. Union of India (1985) 152 ITR 308 (SC),
Shailendra Kumar v. Union of India (1989) 175 ITR 494 (All.),
Varghese (K.P.) v. ITO (1981) 131 ITR 597 (SC)
|
| Laws Involved |
Income Tax Act, 1961
|
| Sections |
17(2)
|