Deepak Verma, J.

1. Heard Sri M.V. Seshachala counsel for the Appellant and Sri G. Parthasarathi counsel for the Respondent.

2. This appeal is under Section 260A of the Income Tax Act, 1961, (hereinafter shall be referred to in short "the Act"), at the instance of the revenue, against the order passed by the Income Tax Appellate Tribunal. The appeal has been admitted on the following substantial questions of law:

(1) Whether, on the facts and in the circumstances of the case, the Tribunal was correct, both on facts and in law, in holding that the reimbursement of club membership fees and allowance on furnishing etc. provided by the Assessee-company to their executives are not perquisites under Section 17(2) of the Act

(2) Whether, on the facts and in the circumstances of the case, the Tribunal was correct, both on facts and in law, in holding that the Assessee cannot be treated as an Assessee in default under Section 201 of the Act for failure to deduct tax attributable on perquisite in respect of soft furnishings and reimbursement of club membership fees

3. The facts of the case in a nutshell are as under:

The Assessee is a limited company which paid club fees on behalf of its executives, who are members of respective clubs, on account of the fact that they happen to be the executives of the company. According to the Assessee, corporate membership has been obtained by the company for the benefit of the Assessee and it is not a perquisite in the hands of the Assessees executives.

4. According to the revenue, reimbursement by the Assessee of individual membership of clubs is clearly a perquisite within the meaning of Section 17(2) of the Act.

5. The assessing officer treated the same as individual membership fees to clubs as perquisites holding that the membership fee is payable by the executive from his own individual funds in the capacity of being an individual member, which is a fact. Hence, the demand of Rs. 61,711 under Section 201 of the Act was raised and interest thereon under Section 201(1A) of the Act was also raised.

6. The Assessee had also incurred certain expenditure on soft furnishings such as linen, tablecloth, curtain, carpet, crockery and cutlery at the residence of its executives. The expenditure of Rs. 2,07,857 incurred under this head was treated as perquisites as the employee executives were the direct beneficiaries of the aforesaid materials. Thus, short recovery of tax was computed at Rs. 93,121 together with interest under Section 201(1A) of the Act at Rs. 19,788. Against the order of the assessing officer, an appeal was taken by the Assessee to the Commissioner (Appeals) which also met with the fate of dismissal. Against this order, the Assessee preferred further appeal before the Income Tax Appellate Tribunal. Appeal having been allowed, the revenue is before us challenging the order passed by the Tribunal.

7. During the course of hearing, we were taken through the order passed 7 by the assessing officer. The assessing officer had proceeded on the assumption that as the company had consistently refused to furnish the names of the senior executives who were the beneficiaries of these payments, he had no choice but to add a sum of Rs. 2,07,857 to the total salary disbursement by the employer and calculate the tax accordingly.

8. Learned Counsel for the Respondent-Assessee submitted that these details were furnished to the assessing officer as far back as on March 28, 1994. Along with the said letter, list of executives who were conferred the said benefit was also furnished and if the assessing officer wanted to verify, he could have done so. But this has not been taken into consideration at all and on the wrong premise he proceeded to decide the matter against the Assessee.

9. We also find from the order passed by the assessing officer that even though this material piece of evidence was available with him, but the same has not been taken into consideration at all. In view of this, we have no alternative but to set aside the order passed by the Income Tax Appellate Tribunal, order passed by the Commissioner (Appeals) as well as the order passed by the assessing officer. Matter is remanded to the assessing officer to reconsider the whole issue in the light of the letter dated 28-3-1994, together with annexure annexed therewith, to ascertain the factual aspect of the matter. In case, any further details are required, the Assessee is directed to furnish the same to the assessing officer.

10. With the aforesaid direction, this appeal stands disposed of without answering the aforesaid substantial questions of law formulated by the Appellant.