Per Pramod Kumar, Accountant Member. - This is an appeal filed by the assessee and is directed against the order dated 15th December, 2004 passed by the CIT(A) in the matter of assessment under section 143(3) read with section 254 of the Income-tax Act, 1961 [hereinafter referred to as ‘the Act’] for the assessment year 1998-99. The assessee has challenged the impugned order on the following grounds:

"GROUND I

1. The learned Commissioner of Income-tax (Appeals) - Mumbai XVI [‘CIT(A)’] erred in treating the sum of Rs. 4,79,13,851, being the amount received on redemption of ‘Stock Appreciation Rights [SARs]’ by the appellant during the financial year 1997-98 as taxable perquisites under the head ‘Salaries’.

2. He further erred in holding that :-

(i)Since the SARs were granted to the appellant by Procter & Gamble Inc. USA (‘parent company - grantor of SARs’) on behalf of and by virtue of his being incumbent of Procter & Gamble India (‘employer’), the same were taxable as perquisites, even though there was no employer-employee relationship between the appellant and the grantor of the SARs.

(ii)The grant of SARs and its redemption is clearly linked with the appellant and arise because