ITC LIMITED GURGAON vs COMMR.OF I.T(TDS) DELHI

The Supreme Court upheld the Delhi High Court's judgment regarding the tax treatment of tips paid to employees by employers under the Income Tax Act, 1961. The Court clarified that while tips received directly by employees are not subject to tax deduction at source under Section 192, tips paid via credit cards, which are processed through the employer, constitute 'salary' under Section 17(3)(ii). Consequently, the employer is liable to deduct tax at source for such payments, affirming the High Court's interpretation of Sections 15, 17, and 192 of the Act.