Zonga Ram is a Member of Legislative Assembly of Rajasthan. He underwent an open heart surgery in July, 2019 abroad in respect of which he was paid by the State Government an amount of ₹15 lacs towards reimbursement of h

The facts of this case are similar to the facts in CIT v. Shiv Charan Mathur (2008) 306 ITR 126 where the Rajasthan High Court observed that MPs and MLAs do not fall within the meaning of "employees". The remuneration received by them, after swearing in, cannot be said to be taken and falling under salary within the meaning of section 15 of the Income tax Act, 1961, since the basic ingredient of employer-employee relationship is missing in all such cases. The remuneration received by MPs and MLAs is taxable under the head "Income from Other Sources" and not under the head "Salaries". When the provisions of section 15 are not attracted to the remuneration received by MPs and MLAs, the provisions of section 17 also would not apply as section 17 only extends the definition of salary by providing that certain items mentioned therein would be included in salary as "perquisites". The reimbursement of medical expenditure (incurred for open heart surgery abroad) to Zonga Ram MLA cannot be taxed as a perquisite under section 17 as being stated by AO in show cause notice. Applying the above ruling to the case the contention of the Assessing Officer is not correct.