' AJMAL MIAN, J.-- These four incom-tax references raise the following common question of law:- "Whether' in the facts and circumstances of the case the Tribunal was right in holding that for determining the perquisites contemplated by section 10(4)(d) of the Income-tax Act the provisions of rule 39 of the Income-tax Rules cannot be pressed-into service and that the provisions of section 10(4)(d) of the Income-tax Act and that of the Income-Tax Rules are completely independent?"
' The brief facts leading to the filing of the above references are that the Income-tax Officer for the assessm ent years 1964-65 to 1967-68 declined to the question of perquisite under section 10(4)(d) of the Income-tax Act with reference to section 7 of rule 39 of the Income-tax Rules published in 1969. The applicant went in appeal before the Income-tax Appellate Tribunal (namely No, AC- 258/B for the assessm ent year 1964-65 Appeal No, AC-600/B for the assessment year 1965-66, Appeal No, AC-618/B for the assessm ent year 1966-67 and Appeal No, AC-63/B for the assessment year 1967-68), but the above appeals were dismissed by a common order, dated 17-8-1972 by the Income-tax Appellate Tribunal. The applicant has, therefore, filed the present four references.
2. In support of the above references Mr. Ali Athar, learned counsel for the applicant has vehemently urged that since the word 'perquisite' has not been defined in the Act or in the Rules and has been used in section 10(4)(d) as well as in section 7 of the Act, reference can be made to section 7 read with rule 39 of the Rules for the purpose of computing the amount for tax purpose under section 10(4)(d). It was further urged by him that perquisite connotes some benefit which goes into the pocket of an employee and not into the pocket of some body else and, therefore, while computing the amount prescribed under section 10(4)(d), the Court will have to take into consideration the above aspect.
' On the other hand Mr. Nasrullah Awan learned counsel for the respondent has contended that the question as framed requires the opinion of this Court only on the point whether a reference can be made to section 7 or rule 39 while computing the provision of section 10 of the Act.
3. Mr. Ali Athar in support of his contention has referred to the case of Pook (H.M. Inspector of Taxes) v. Owen 45 Tax Cases (1966-69) 571, which is a case decided by the House of Lords and in which several Lords have delivered separate judgments. However, Mr. Ali Athar has made particular reference to a passage from the judgment delivered by Lords Pearce which reads as follows:- "There is a further point raised by the appellant in the Court of Appeal. He contends that reimbursements such as that which is here in question do not come within the 'emoluments' of an appointment or employment under Schedule 'E'. They, therefore, never fall to be charged, and it is unnecessary to consider whether they are allowable under rule 7. In my opinion, that contention is correct. 'Emoluments' are charges. These are defined as including 'all salaries, fees, wages, perquisites and profits whatsoever'. The reimbursements of actual expenses are clearly not intended by 'salaries', 'fees', 'wages' or 'profits'. It is contended that they are 'perquisites'. The normal meaning of the word denotes something that benefits a man by going into his own pocket. It would be a wholly misleading description of an office to say that it had every large perquisites merely because the holder had to disburse very large sums out of his own pocket and subsequently received a reimbursement or partial reimbursement of these 3UMS. If a school teacher takes children out for a school treat, paying for them out of his (or her) own pocket, and is later wholly or partially reimbursed by the school, nobody would describe him (or her) as enjoying a perquisite. In my view 'perquisite' has a known normal meaning, namely, a personal advantage, which wouid not apply to a mere reimbursement of necessary disbursements. There is nothing in the section to give it a different meaning. Indeed, the other words of the section confirm the view that some element of personal profit is intended."
' He then referred to the case of a Division Bench of the Bombay High Court, namely, Commissioner of Income-tax, Bombay City I v. D.R. Phatak (1975) 99 I T R 14 in which the question before the Division Bench was, whether the compensatory city allowance is a perquisite within the meaning of section 17(2) of the Indian Income-tax Act, 1961. The contention of the department was that it was a perquisite but this was repelled by the Division Bench. It was held that the word 'perquisite' as defined in the Oxford English Dictionary means any casual emolument, fee or profit attached to an office or position, in addition to salary or wages and not something which is paid to reimburse or compensate for the extra expenses.
4. In our view, the sole question before us is whether a reference can be made to rule 39 while construing the provision of section 10(4)(d). It may be observed that rule 39 was framed with the object of providing limit of the amount of perquisites in the hand of an employee for tax purpose under section 7. The rule as framed itself commences with the word 'For the purpose of assessment under section 7 of the Act' whereas section 10(4)(d) prescribes the maximum limit of the amount spent on perquisites, on which an employer is not liable to pay income-tax. In other words, section 7 deals with the income-tax liability of an employee, whereas section 10(4)(d) deals with the liability of an employer with reference to the amount spent on perquisites. The questions whether the entire amount spent on the maintenance of the bungalow or on the entertainment or on the maintenance of the car are questions of fact, which are to be adjudicated upon by the department as there is no guideline provided for in section 10(4)(d) as to its apportionment. As observed hereinabove the point in issue before us is whether while construing section 10(4)(d) a reference can be made to rule 39, we are B of the view that no reference can be made to rule 39 for the reasons already given hereinabove.