Assessment Year 1990-91 v. M/s Saipem S.P.A

Whether, circumstances of the case, the learned I.T.A.T. was not legally justified in holding that no perquisite arose on account of free accommodation facility provided by the employer to its employee and the Assessment Authority was not justified in charging interest u/s 201 (1A) of the Income Tax Act?” 4) Heard learned counsel for the parties and perused the record. 5) As this Court has discussed in Income Tax Appeal No. 57 of 2002, in the case of Commissioner of Income-tax and another Vs. Sedco Forex International Drilling Co. Ltd. decided on 9th October, 2003; the reasoning regarding these questions are given as under: In this case, assessee had to work on the rig. It was hazardous, arduous and continuous. Under circumstances free accommodation, food and beverages is a necessity. It is not a luxury. It is not a perquisite. Its value cannot be income of the assessee. Therefore, Department cannot levy interest on the employer under Section 201/ 201 (1A) of the Income-tax Act. 6) In view of the above discussion, the above questions of law are answered in the affirmative i.e. in favour of the assessee and against the Department. 7) The Appeal is dismissed accordingly. No order as to costs. (P.C. Pant, J.) (P.C. Verma, J.) Dt. 16th July, 2005. H.Negi