These are Departmental appeals in respect of asst. yrs. 1978-79 and 1979- 80. only question involved in these appeals is whether ITO was justified in adding to assessee s total income sums of Rs. 7,630 and Rs. 37,807 as perquisite under s. 17(2)(iii) of IT Act, 1961. facts giving rise to above controversy may be noted. assessee i s employee of Punjab & Sind Bank. He purchased property No. F-B, Jangpura for sum of Rs. 3,03,000 after raising loan from his employer bank, which advanced loan of 2,50,000 to assessee at rate of 4 per cent and further of Rs. 50,000 at rate of 12.5 per cent. property was in joint names of assessee and his wife and therefore, bank insisted that wife should also join in executing necessary papers for purpose of raising loan. Before ITO assessee took plea that loan was not given by bank to assessee alone but that loan was given jointly by bank to assessee and his wife and that, therefore, question of adding anything by way of perquisite did not arise. ITO did not accept above contention of assessee and he pointed out that entire loan of Rs. 3,03,000 had been advanced by employer bank to assessee under Banking Housing Loan Scheme contained in staff Circular No. 400 dt. 19th May, 1973 and that under aforesaid scheme of bank only permanent employees of bank were eligible for obtaining loan and that even though loan could be available also in name of spouse yet it was to advanced to both jointly and severally and loan was given to employee, as as he was in employment with bank and that such loan could not have been given to him, if he had not been employee of bank or to his wife, if she were not in employment. basic connection of employer and employee must subsists before bank granted loan and, therefore, granting loan to employee at concessional rate would amount to providing perquisite to employee, because it amounted to benefit of raising loan at concessional rate. assessee s contention that there was no concessional rate involved because loan had been given by bank not below its cost, was also rejected by ITO. assessee, therefore appealed, to AAC and reiterated before her both above contentions. After examining scheme under which loan had been given by bank to assessee, ld. AAC rejected first contention of assessee. She held that loan in question was given by bank to assessee because he was employee of bank and that "while giving loan to employee for house name of spouse has been included only for sake of name and substance of transaction remains that loan has been given to appellant from whose funds house was acquired " She, however, did not accept conclusion of ITO that loan in question had been advanced at concessional rate of interest. She accepted position that rate of interest at which loan had been given to assessee by bank was not below its cost and, therefore, it cannot be said that any concession had been given to assessee. following observations were made by her in this connection: "The answer to question whether employee has been given any concession in rate of interest must depend on answer to question as to what was cost of employer in respect of amount advanced to employee. bank charges different rates of interest for different categories of customers and therefore rate of interest may vary in varying circumstances. reference figure of 18 per cent chosen by ITO is market rate and not cost to bank and same cannot, therefore, he held to be applicable in case of appellant." ITO had relied on following decision for coming to this conclusion: (1) CIT, Madras vs. Kulandaivelu Konar (1975) 100 ITR 629 (Mad) (2) Addl. CIT vs. Late Sh. A. K. Laxmi & Ors. 1978 CTR (Mad) 171: (1978) 113 ITR 368 (Mad) AAC observed that facts of afore-mentioned case were different from facts of present case. In above cases, according to ld. AAC. "High Court was dealing with question whether granting of amount by t h e company for personal use of its employee without charging interest would amount to grant of any benefit. question was rightly answered by High Court in affirmative. In Instant case employer bank has charged interest though in opinion of ITO, it was concessional rate of interest. Since addition made by ITO on account of perquisite under s. 17(2)(iii) is based on market rate of interest and not on cost to bank addition made by ITO in respect of perquisite cannot be upheld " Revenue is in appeal against aforesaid order of ld. AAC and it is urged by ld. Departmental representative that granting of loan @ 4 per cent and 12.5 per cent rate of interest was without doubt concessional rate, because, at above rates, bank never advanced loans to its customers. loans at above rates of interest were advanced to assessee only because he was employee of bank and as such loan in question had to be regarded as given at concessional rate. For finding out as to whether or not loan was given at concessional rate of interest, one had to ask whether other customers would be given loans at same interest, if not, loan in question at above rates would be concession loan to assessee. ld. AAC had asked wrong question, while determining as to whether there was concession in question of charging interest. This question could not be determined with reference to cost of funds by bank but with reference to rates at which similar loans were advanced to other customers. ld. Departmental representative also relied on decisions of Hon ble Madras High Court, referred to above, and on decision of same High Court in case of CIT vs. S.S.M. Lomgappan (1980) 19 CTR (Mad) 56: (1981) 129 ITR 597 (Mad). Our attention was also invited to certain decisions of Tribunal ITO vs. Bagrecha Udhna M.G., (1982) 1 ITD 292 (Mad), H. S. Salian vs. Fourth ITO (1982) 1 ITD 835 (Bang) and ITO vs. Tukaram S. Pai (1983) 3 ITD 589 (Bang) wherein similar view has taken by ITO has been upheld by Tribunal. On behalf of assessee above submissions were stoutly opposed by ld. counsel for assessee, who pointed out that all cases relied on ld. Departmental Representative had been taken note of by Tribunal while determining appeal in case of K. P. Pednekar vs. ITO (1983) 6 ITD 483 (Bom) and it has been finding of Tribunal in that case that advancing of loans at 4 per cent interest to employee by bank did not amount to providing perquisite to employee by employer. According to learned counsel loan in question had not been given by employer bank to employee in compliance with any term of Service Contract of employee with employee. loan had been given under separate contract and it would be wrong to regard granting of loan @ 4 per cent and 12.5 per cent interest, in circumstances as, providing perquisite to employee. It was also pointed out by ld. counsel for assessee that Taxation IT (Amendment) Act, 1984 had brought in amendment w.e.f. 1st April, 1984 making granting of loan to employees at concessional rate as perquisites taxable under head Salary , but said provision had since been deleted by Finance Act, 1985, with retrospective effect and that intention of legislature not to treat concessional granting of loan to employee as perquisite was patent from above. In view of this clear intention of legislature, addition in question should be deleted and ld. AAC was justified in deleting same. We have given careful consideration to facts of case and rival submission. Clauses (iii) of sub-s. (2) of s. 17 of IT Act, 1961 reads, so far so its relevant for our purpose, as below: "perquisite" includes (iii) value of any benefit or amenity grated or provided free of cost or at concessional rate in any of following cases (a) xxx (b) xxx (c) by any employer (including company) to employee to whom provisions of paragraphs (a) and (b) of this sub-clause do not apply and whose income under head "Salaries". Exclusive of value of all benefits or amenities not provided for by way of monetary payment exceeds eighteen thousand rupees." assessee s salary in terms of aforesaid cl. (c) was Rs. 43,290 in accounting period corresponding to 1978-79 when loan in question was given by Punjab & Sind Bank to assessee. His salary was thus above Rs. 18,000. Punjab & Sind Bank is employer of assessee. Therefore, if it can be shown that benefit or amenity has been granted by said bank of assessee and that said benefit or amenity is free of cost or is at confessional rate, benefits in question would be perquisite in terms of aforesaid cl. 3 of sub-cl. (2) of s. 17 of IT Act, 1961. In present case, it is nobody s case that benefit in question has been grated by employer bank to employee free of cost. case of ITO is that amenity of housing loan has been given by bank of assessee at concessional rate and that, therefore, it is perquisite. contention of assessee is that payment by bank to him is not in terms of contract of employment of assessee with bank and that benefit has been granted to him under separate contract and that granting of such amount was unilateral character and, therefore, it could not be said that amount paid was perquisite. In case of CIT vs. SSM Ltngappan (supra) their Lordship of Hon ble Madras High Court had occasions to consider this contention of granting of unilateral conferment of benefit on employee by employer and their Lordships expressed opinion therein that, even if benefit had been conferred on director unilaterally without agreement between parties, benefit could be taxed as perquisite under s. 17(2)(iii). In present case, it has been placed on record by authorities below, including ld. AAC that loan in question has been given by bank to assessee not as customer but as employee of bank, and if assessee had not been employee, he would not get loan in question at rates of interest namely 4 per cent and 12.5 per cent. Granting of loan by bank to assessee may not have been in terms of contract of employment of assessee with bank but it was certainly given by bank under scheme drawn up by bank to make available certain facilities to its employees and relationship in which loan was advanced by bank to assessee was without doubly that of was advanced by bank to assessee was without doubly that of employer and employee and not of bank and customer simpliciter. In view of this, it is not possible for us to hold that on facts of present case, advancing of loan by Punjab & Sind Bank to assessee was not by employer to employee. This being so, it has to be seen whether advancing of loan is at concessional rate. If it is so, there would be benefit granted to assessee by employer and such benefit would be taxable in terms of s. 17(2)(iii). approach of ld. AAC to determine whether or not loan advanced to assessee @ 4 per cent and 12. 5 per cent is at concessional rate was in our opinion wrong because he compared rate of advancing of loan with cost of said loan to bank. ld. AAC did not even ascertain cost of loan to bank and proceeded on footing that cost was not lower than 4 per cent and as such no concession was involved. Apart from above lacuna in approach of ld. AAC, test evolved by her, namely, comparison of cost of loan with rate at which loan was advanced by bank to assessee is, in our opinion, erroneous. Whether or not there was concessional rate of interest has to be determined with reference to interest chargeable by bank from its normal customers, and not with reference to its cost of raising amount which was given by way of loan. loan in question was given by bank @ 4 per cent to extent of Rs. 2,50,000 and Prima facie aforesaid rate is concessional, to what extent it is however, concessional should have been determined by ITO by making reference tot he Punjab & Sind Bank as to what was rate it was charging from its normal customers, when it advanced loans to them for house building or for such long term purposes. Whatever be rate so chargeable that should be ascertained and same should then be compared with rates charged by bank from assessee with view to ascertain rate on which loan was given by bank to assessee. amount to be added to assessee s total income on account of perquisite under s. 17(2)(iii) would be determined with reference to such difference in rate in question. We have gone through case of K. P. Pednekar vs. ITO (1983) 6 ITD 483 (Bom). That case has proceeded on footing that facts in that case were different from those which have been considered by Hon ble Madras High Court in CIT vs. Kulandaivelu Konar (supra), Addl. CIT vs. Late A. K. Lakshmi (supra) and CIT vs. S.S.M. Lingappan (supra). We are unable to record such finding of facts in present case, Distinction sought to be made by ld. AAC is, in our opinion, without substance. Whether benefit was given free of cost or it was give at concessional rate, in either situation, there would be benefit which would result in perquisite to employee. Merely because loan in cases covered by CIT vs. Kulandaivelu Konar (supra) and Addl. CIT vs. A. K. Lakshmi & Ors. (supra) had been given free of cost, it would not be correct to say that ratio of those decisions would not cover facts of present case, provided it can be found of present case, provided it can be found as fact in present case that rate of interest charged from assessee by bank was concessional. If provision of loan at concessional rate is established, perquisite would, in our opinion result to assessee. In view of what we have observed above, we would restore martter bank to ITO with direction that he would ascertain from bank at what rate loans are normally advanced by bank to customers for purpose o f house construction or other such long terms loans. rate so determined should then be compared with rate at which loan had been granted to assessee and in this manner concession granted to assessee should be determined and value of such concessional benefit should be added tot he assessee s total income. contention of assessee was that there was amendment in law by Taxation (Amendment) Act, 1984 and that later on, by Finance Act, 1985, said amendment was revoked retrospectively, and that, therefore, it should be presumed to be intention of legislature that advancing of loans at confessional rate of interest should not be treated as perquisite is not acceptable to us. decisions of Hon ble Madras High Court, on which we are placing reliance (it may be noted that no contrary decision of any Other High Court had been brought to our attention) were given with reference to language of cl. (iii) of sub-s. 2 of s. 17 of IT Act, 1961 and when matter is covered squarely by language of said cl. (iii), we see no reason as to why we should not give effect to plain language of such section which is we should not give effect to plain language of such section which is unambiguous and we should change our instance merely because amendment brought in by Taxation Law (Amendment) Act, 1984 had subsequently been withdrawn by Finance Act, 1985. effect of aforesaid amendments may be relevant for consideration in respect of asst. yrs. 1984-85 and 1985-86 but not in respect of 1978-79 and 1979-80. In respect of these years matter has to be considered in terms of cl. (iii) of sub-s. (2) of s. 17 and not in terms of amendment introduced by Taxation (Amendment) Law or Finance Act, 1985. In result Departmental appeals are treated as allowed for statistical purposes. *** INCOME TAX OFFICER v. HARBHAJAN SINGH