Taxes paid by the employer is treated as perquisites included in the salary and cannot be consider monetary payment to employee

The decision of CIT Vs. America Counting Corporation 123 ITR 513, noted above also supports the view that taxes paid on behalf of the assessee is a perquisite or a benefit, but not income from business. It could not be taxed except under clause (iv) of Section 28 which provided that a benefit or perquisite was liable to be charged to tax.

It is not money, which is paid to the assessee when taxes are paid on his behalf, it is discharge of his obligation. The payment fully fits in the jacket of sub-clause (iv) of

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