Law:

Section:

Section 40(c) of the Income-tax Act, 1961 - Business disallowance - Remuneration, etc., paid in excess of prescribed limit in case of company etc. - Assessment year 1965-66 - Whether payments made by assessee-company to its employees by way of reimbursement of medical bills did not represent expenditure resulting directly or indirectly in provision of any benefit or amenity or perquisite to said employees within meaning of section 40(c) (iii) - Held, yes FACTS The Tribunal held that the payments made by the assessee-company to its employees by way of reimbursement of medical bills did not represent expenditure resulting directly or indirectly in the provision of any benefit or amenity or perquisite to the said employees within the meaning of section 40(c)(iii ). On reference: HELD In view of the decision of the same High Court in the cases of CIT v. Kanan Devan Hills Produce Co. Ltd. [1979] 119 ITR 431 , Indian Leaf Tobacco Development Co. Ltd. v. CIT [1982] 137 ITR 827, CIT v. National and Grindlays Bank Ltd. [1984] 145 ITR 457, it was held in the instant case that the order of the Tribunal was justified. Note: The case was decided in favour of the assessee. CASES REFERRED TO CIT v. Commonwealth Trust Ltd. [1982] 135 ITR 19 (Ker.) [FB], CIT v. Manjushree Plantations Ltd. [1980] 125 ITR 150 (Mad.), CITv. Mysore Commercial Union Ltd. [1980] 126 ITR 340 (Kar.), CIT v. Warner Hindustan Ltd. [1984] 145 ITR 24 (AP), Instalment Supply (P.) Ltd. v. CIT [1984] 149 ITR 457 (Delhi), CIT v. Kanan Devan Hills Produce Co. Ltd. [1979] 119 ITR 431 (Cal.), CIT v.National and Grindlays Bank Ltd. [1984] 145 ITR 457 (Cal.) and Indian Leaf Tobacco Development Co. Ltd. v. CIT [1982] 137 ITR 827(Cal.). M.L. Bhattacharjee, for the Applicant. JUDGMENT Ajit Kumar Sengupta, J.-In this reference under section 256(1) of the Income-tax Act, 1961, for the assessment year 1965-66, the following question of law has been referred to this court : "Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the payments made by the assessee to its employees by way of reimbursement of medical bills incurred by the employees did not represent expenditure…

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