Judgment :- R. JAYASIMHA BABU, J. For the four asst. yrs. 1974-75 to 1977-78, the income of the assessee was grossed up and taxed levied thereon by the ITO. The mode of calculation was found to be erroneous by the Tribunal. It held that there was no material before the authority from which it could be said that the salary paid to the assessee who was a nurse employed by the American Madura Mission of the United Church Board for World Ministries and who had served at the Christian Medical College Hospital at Vellore had been granted tax-free income by her employers. The assessee was a national of United States and a nurse by profession. She had filed returns for the years 1974-78 showing the income of Rs. 34, 653 for the asst. yr. 1974-75, Rs. 40, 508 for the asst. yr. 1975-76, Rs. 67, 741 for the asst. yr. 1975-76 and Rs. 48, 035 for the asst. yr. 1977-78. At the time of filing the return the amount of tax payable on the income aforementioned is viz., Rs. 9, 574, Rs. 12, 082, Rs. 17, 450 and Rs. 19, 883 were shown as income-tax allowance. There was no written contract between her and the hospital which paid her the salary. 2. At the instance of the Revenue, the question referred to us on the facts set out above is: "As to whether the ITO was not correct in grossing up the assessee's income on tax on tax basis and that only the amount actually received towards income-tax payments could be taxed for these assessment years ?" 3. The Tribunal has recorded a clear finding that there is no written contract and that there was nothing on record to show that there was either an implied contract or practice or understanding or something else to suggest that the assessee had any right to any tax-free salary. The Tribunal held that in the absence of any material to show that the assessee was being paid tax-free salary, the method of grossing up could not have been adopted. The Tribunal referred to the fact that the certificate of payment as well as the returns show that the amount given to her as income-tax allowance and which amounts were offered for tax were the only amounts given to her and nothing more was given. The Tribunal referred to the fact that the certificate of payment as well as the returns show that the amount given to her as income-tax allowance and which amounts were offered for tax were the only amounts given to her and nothing more was given. There was nothing to show that she had any further right to any further amount. The fact that the allowance given to her was called as income-tax allowance by itself was found by the Tribunal to be wholly insufficient to hold that the salary paid to her was tax-free salary and that the assessee was entitled to any further amounts from her employer. 4. We are in agreement with the view of the Tribunal. The name given by the employer to an allowance paid to an employee does not by itself determine or necessarily lead one to the conclusion that the salary paid was a tax-free salary. The assessee herein had been paid the salary and in addition to that, an allowance was given termed as 'income-tax allowance'. The assessee was not given the right to claim any further amount from the employer on account of having to pay amounts as tax in excess of that amount of the allowance. The allowance was given towards payment of income-tax. The allowance so, given therefore, did not result in her salary becoming a tax-free salary. The assessee had offered that amount of allowance also to tax and her total salary was, therefore, required to be regarded as the salary as reported by her plus the amount of the income-tax allowance. The ITO was clearly in error in assuming that this was an instance of tax-free salary having been paid to the assessee and therefore, the principle of grossing up was required to be applied. 5. Learned counsel for the Revenue brought to our notice a decision of the Delhi High Court in the case of Frank Beaton vs. CIT 1985 Indlaw DEL 161 (Del), wherein in similar circumstances, the Court held that the principle of grossing up was inapplicable. The assessee therein was paid a salary and in addition, he had been told that payment of any local Indian income-tax on that salary would be the company's responsibility. The assessee therein was paid a salary and in addition, he had been told that payment of any local Indian income-tax on that salary would be the company's responsibility. The Court held that that undertaking of the employer did not amount to a promise to ensure the payment of the salary without any liability for paying any income-tax thereon. Ranganathan, J (as he then was) in his concurring judgment referring to s. 17(2)(iv) of the IT Act, 1961, which inter alia defines, "perquisites" to include, "any sum paid by the employer in respect of any obligation which, but for such payment, would have been payable by the assessee", held that if the employer had really intended to offer tax-free salary to the employee and not merely the allowance equal to the amount of the tax payable by the employers or the salary which had been agreed to be paid, the liability of the employer would have been many times more than the amount of the tax payable on the salary. In the absence of any material to show that the employee would be entitled to reimbursement of such liability, the salary along with the allowance towards income-tax could not be regarded as tax-free. 6. The question in every case is a question of fact and as to what the employer intended in offering the allowance or indicating a willingness to pay any amount towards income-tax liability of the assessee. On the facts of this case, it is clear that the employer had only agreed to pay an allowance which was a sum calculated on the salary agreed to be given and which sum had been rightly included by the assessee as part of the assessee's income. On the materials before the Tribunal, it could not be said that the employer had agreed to pay tax-free salary as the employer had not agreed to pay any amount in addition to the amount paid as income-tax allowance to meet the tax liability of the assessee and the employer had not undertaken the responsibility of paying income-tax payable by the assessee on the assessee's salary. 7. The Tribunal was, therefore, right in holding that the assessee's income could not be grossed up in the manner done by the ITO. Our answer to the question referred to us is, therefore, in the affirmative, against the Revenue and in favour of the assessee. No costs.