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Issues:
1. Whether cash allowances like conveyance allowance, servants' wages, house rent allowance, and reimbursement of medical expenses should be treated as perquisites under section 40A(5) of the IT Act. 2. Whether the CIT (A) erred in holding that cash payments made by the assessee to its employees could not be treated as perquisites. Analysis: 1. The limited company claimed that cash allowances should not be treated as perquisites under section 40A(5) of the IT Act. The ITO did not accept this argument and did not follow the Tribunal Special Bench decision in the case of Blackie & Sons (Ind) Ltd. The CIT (A), however, directed the ITO to modify the disallowance without treating these items as perquisites. 2. The Revenue appealed before the Tribunal, arguing that the CIT (A) erred in holding that cash payments could not be treated as perquisites. The Departmental Representative relied on the Kerala High Court decision, while the assessee relied on decisions from the Karnataka High Court and Calcutta High Court. The Tribunal considered the arguments and held that cash payments made to employees for certain liabilities should not be treated as perquisites under section 40A(5) of the IT Act. The Tribunal upheld the CIT (A)'s decision, dismissing the Revenue's appeal.
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