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2021 (2) TMI 272 - AT - Income TaxExpenditure Allowable u/s 37(1) - Disallowance of medical insurance premium paid for the family members of the employees of the company - such expenditure though incurred in terms of contractual obligation with the employees, however, it cannot be stated to have been incurred wholly and exclusively for the purpose of the business of the assessee - HELD THAT:- As decided in assessee's own case [2018 (8) TMI 849 - ITAT DELHI] record reveals that the assessee had paid the insurance premiums of the employees’ family members in terms of employment Rules framed by the assessee-company there for. Therefore, it can hardly be said that the impugned expenditure were not incurred wholly and exclusively for the purpose of business, which is the real intent of Section 37(1) Authorities below appear to have rejected the claim of the assessee that these payments were in the nature of perquisites to the employees as contemplated under sub-clause (iv) of section 17(2) of the IT Act, according to which any sum paid by the employer in respect of any obligation which, but for such payment, would have been payable by the assessee, shall be included in perquisites. However, in view of proviso (iii) & (iv) appended to this section clearly prohibit the applicability of section 17(2) in certain eventualities as contained in these provisions - Decided in favour of assessee.
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