Landmark Cases on Salary and Perquisites
17 decisions, ranked by how many judgments on BharatTax rely on them.
An assessee's bona fide estimate of employee salary, when valuing perquisites like residential accommodation, can be accepted if the department only brings contrary information to their notice during assessment proceedings.
An employer is not statutorily obligated to collect evidence from employees regarding the actual utilization of amounts paid towards leave travel concession or conveyance allowance, unless specific requirements are mandated by law or a CBDT circular.
Allotment of shares to employees under an Employee Stock Option Plan (ESOP) before April 1, 2000, is not a taxable perquisite if the benefit's value is unascertainable at the time of option exercise due to conditions like a lock-in period.
An assessee's bona fide estimate of employee perquisites, by valuing residential accommodation as if employees were of the Central Government, can be accepted.
An assessee-employer is not bound to collect and verify proof of journey and actual expenditure before granting exemption under Section 10(5).
The case is authority for the proposition that medical reimbursement provided by an employer to its employees is a perquisite, and therefore, the employer is liable to deduct tax at source (TDS) on such payments. This is in line with the treatment of similar benefits like cash medical benefits.
An assessee cannot be subjected to tax in the absence of a specific provision allowing for such taxation.
In cases involving a deceased who was self-employed or earned a fixed salary, future prospects of income increase are not granted. This principle was affirmed by a bench of three judges.
A 'perquisite' is a personal advantage derived from employment, not a mere reimbursement of necessary expenses.
The definition of 'income' under section 2(24) is inclusive, adding artificial categories without losing its natural connotation. Perquisites under section 17(2) are taxable as 'salary' when paid by an employer on behalf of an employee to discharge an obligation the employee would otherwise bear.
Employer contributions to a pension or annuity fund are not taxable as perquisites in the year of contribution if the employee has no vested right or direct present benefit in the amount.
Payments made by an employer towards pension or annuity schemes are not taxable as perquisites in the hands of the employee unless the employee has acquired a vested right in the sum paid. Similarly, employer contributions to approved superannuation funds are not perquisites if the employee has no vested right.
A husband's obligation to maintain his wife and family stands on a higher pedestal than his own needs. Courts should draw adverse inferences if a husband fails to disclose his exact income. Reducing maintenance drastically after retirement without reason is improper.
A director can have a dual capacity, acting both as a director and an employee. Control over a company does not always need to be day-to-day and can be exercised through articles of association or by virtue of designation and seniority.
Income-tax paid by an employer on behalf of an employee is considered a part of the employee's salary and is a perquisite that should be included in the computation of income tax.
Leave Travel Concession (LTC) is available for employees traveling to any place in India and returning to their origin, without a foreign leg.
