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2008] 306 ITR 411 [2007] 164 Taxman 486 (Delhi) HIGH COURT OF DELHI Krishan Bans Bahadur v. Commissioner of Income-tax MADAN B. LOKUR AND V.B. GUPTA, JJ. IT REFERENCE NOS. 82 TO 85 OF 1986 JULY 3, 2007 Section 2(24) of the Income-tax Act, 1961 - Income - Definition of - Whether cash payments made directly to assessee-employee towards medical reimbursement by his employer fall outside scope of section 2(24)(iv) - Held, yes Words and phrases - 'whether convertible into money or not' as occurring in section 2(24)(iv) of the Income-tax Act, 1961 CASES REFERRED TO CIT v. Mafatlal Gangabhai & Co. (P.) Ltd. [1996] 219 ITR 644/85 Taxman 381 (SC) (para 4). Rajan Bhatia for the Appellant. Mrs. P.L. Bansal for the Respondent. JUDGMENT Madan B. Lokur, J. - In this reference under section 256(1) of the Income-tax Act, 1961, the following questions of law have been referred for our opinion:- "1. Whether on the facts and in the circumstances of the case, the proceedings commenced under section 147(a) of the Income-tax Act are valid? 2. Whether on the facts and in the circumstances of the case, the Appellate Tribunal was justified in holding that reimbursement of medical expenses in the form of payment to nurses represented a 'benefit' liable to tax? 3. Whether on the facts and in the circumstances of the case, the provisions of section 2(24)(iv) are applicable, and the said income is assessable under section 56 of the Income-tax Act, 1961?" 2. Question No. 1 is not pressed by learned counsel for the assessee and, therefore, we return it unanswered. 3. Question Nos. 2 and 3 arise from the fact that the assessee had incurred certain expenses for his medical treatment and the expenses were reimbursed to him in cash by his employer. Accord¬ing to the revenue, this represented a benefit derived by the assessee and was his income within the meaning of section 2(24)(iv) of the Income-tax Act, 1961 ('the Act'). 4. It is submitted by learned counsel for the assessee that in view of the decision of the Supreme Court in CIT v. Mafatlal Gangabhai & Co. (P.) Ltd. [1996] 219 ITR 644, the questions that have been referred are now required to be answered in the negative, in favour of…

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