8. Having heard both the parties and having considered their rival contentions, let us consider the relevant provisions of law.
[a] We find that the term ‘income’ has been defined in sec.2 to include the value of any perquisite or profits in lieu of salary taxable under clauses  and  of section 17.
[b] Sec.17 defines ‘salary’, ‘perquisites’ and ‘profits in lieu of salary’ and clause  thereafter defines the term ‘perquisites’ to include the value of any benefit or amenity granted or provided free of cost or at concessional rate by a company to an employee who is a director thereof, or an employee being a person who has a substantial interest in the company or an employee to whom provisions of paragraphs [a] and [b] of this sub-clause do not apply and whose income under the head ‘salaries’ exclusive of the value of all benefits or amenities not provided for by way of monetary payment, exceeds fifty thousand rupees.
[c] The explanation to clause  provides that “For the removal of doubts, it is hereby declared that the use of any vehicle provided by a company or an employer for journey by the assessee from his residence to his office or other place of work, or from such office or place to his residence, shall not be regarded as a benefit or amenity granted or provided to him free of cost or at concessional rate for the purposes of this sub-clause.”
[d] Section 10 provides for the incomes which do not form part of total income, and cl.[i] of sub-sec. of sec. 10 provides that any such special allowance or benefit, not being in the nature of a perquisite within the meaning of clause  of sec. 17, specifically granted to meet expenses wholly, necessarily and exclusively incurred in the performance of the duties of an office or employment of profit, to the extent to which such expenses are actually incurred for that purposes; and clause [ii]- provides that any such allowance granted for the-assessee either to meet his personal expenses at the place where the duties of his office or employment of profit are ordinarily performed by him or at the place where he ordinarily resides, or to compensate him for the increased cost of firing.
9. From the above provisions, it is clear that what is exempt u/s.10 of the Act is an allowance or benefit which is granted to meet expenses wholly, necessarily and exclusively for the performance of duties of an office or employment of profit. The perquisites within the meaning of cl. [ii] of sec. 17 is excluded from the exemption clause. Sec.l7 gives the meaning of perquisites and sub-sec. thereof provides for the value of any benefit or amenity granted or provided free of cost or at a concessional rate to an employee. This perquisite has to be considered as part of the income of the assessee. However, Explanation [iii] of sub-sec. of sec.17 clearly provides that the use of any vehicle provided by an employer to an employee for purposes of performance of his duties or for journey from his residence to his office or vise versa shall not be regarded as benefit or amenity granted or provided to him free of cost at a concessional rate for the purposes of this clause. Therefore, the transportation facilities provided by an employer to an employee from his residence to office and office to residence is not a perquisite within the meaning of sub-sec. of section 17.