TMI Blog1996 (2) TMI 118X X X X Extracts X X X X X X X X Extracts X X X X ..... the reimbursement of medical expenses to the employees was a perquisite for the purpose of computing the disallowance under section 40A(5) or 40(c) ?" Necessary short facts are that the assessee is a public limited company carrying on various business activities such as agency for shipping lines, clearing and forwarding, coffee curing, etc. As far as the first question is concerned it can be seen that for the assessment year in question the assessment was completed on January 25, 1979, on a total income of Rs. 16,18,100. This was reopened subsequently on January 21, 1981, under the provisions of section 147(b) of the Income-tax Act. This was for the purpose of withdrawing certain allowances which had been granted mistakenly in the origin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome-tax Act resulting in reopening the assessment. The first appellate authority also confirmed the decision treating medical expenses as perquisite for the purpose of disallowance under section 40A(5) of the Income-tax Act. This was on the basis of treating medical expense as a perquisite, referring the allied situation. The Appellate Tribunal also considered these questions. It was submitted before the Tribunal, with regard to the first question that the power to reopen the assessment does not become readily available as a result of a mere change of opinion in the matter. The Tribunal considered in fact the reasons recorded by the Income-tax Officer to record that the decision of this court in I. T. R. No. 67 of 1976 being to the effe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eopen by resort to powers under section 147(b) of the Income-tax Act. With regard to the second aspect although learned counsel placed before us the decision cited before the Tribunal as well as other decisions, it must be stated that the question as to whether medical expenses and consequent reimbursement would be medical perquisite gets basically answered through the plain language of the statutory provision itself in the first instance. It must also be specified in anticipation that a bare reading of the provisions of section 40A of the Act relating to expenses and payments being declared as not deductible in certain circumstances, it would be seen that for the limited purpose of finding out as to what would be a perquisite, the provisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee-employer would also be a perquisite. Lastly, if any sum is paid by the assessee-employer directly or through a fund this would also amount to perquisite in the above self-sustained and selfexplanatory definition of the term perquisite. The examination of these facets would show that it relates to a specific liquidated sum in the context granted to an employee as terms of employment. These features would require examination and application, in order to appreciate the contention as to whether medical expenses and their consequential reimbursements would share and partake of the character of a perquisite in the sense that it is intended by the above definition. The answer is obviously in the negative. It would be seen that the payment in qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this position, it is unnecessary to refer to another aspect placed by learned counsel for the assessee. Learned counsel submitted that with regard to the same assessment year this court remitted the matter to consider the question in view of the fact that certain Government circulars of the Central Board of Direct Taxes not being available could not be considered. Learned counsel in fact placed for our benefit a copy of the order of the Income-tax Appellate Tribunal, Cochin Bench, considering the question under section 260(1) of the Income-tax Act, 1961, after the said order of remittance of this court. Learned counsel wanted to persuade us adopting the reasoning of the Tribunal in regard thereto contending that although this view is taken ..... X X X X Extracts X X X X X X X X Extracts X X X X
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