TMI Blog1992 (10) TMI 71X X X X Extracts X X X X X X X X Extracts X X X X ..... employees was covered by the definition of the word 'perquisite' given in clause (b) of Explanation 2 to section 40A(5) and thereby disallowing the medical expenses to the extent they exceeded the 1/5th limit provided in section 40A(5) of the Income-tax Act, 1961 ? 2. Whether, on the facts and in the circumstances of the case, the claim for weighted deduction in respect of expenses incurred on the freight, dock charges, etc., and paid in India is admissible under section 35B of the Income-tax Act, 1961 ? 3. Whether, on the facts and in the circumstances of the case, the assessee's claim for weighted deduction in respect of the salary paid to its director, Shri D. R. Sondhi, is admissible under section 35B(1)(b)(viii) ? At the instance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Thereafter, the Revenue filed an appeal to the Tribunal which came to the conclusion that the decision of the Income-tax Officer in not allowing the entire claim was justified. It is not necessary to discuss in any great detail the various provisions of the law because an identical question came up for consideration before this court in the case of CIT v. Shriram Refrigeration Industries Ltd. [1992] 197 ITR 431. It was held that cash payment by the assessee to an employee towards reimbursement of medical expenses was not a perquisite within the meaning of section 40A(5) and was not to be taken into account for calculating the excess amount for disallowance in computing the profits of the assessee. Various cases which had been decided by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isallowed the claim, which was affirmed by the Appellate Assistant Commissioner, by observing that even if Shri Sondhi had not gone abroad, he would have received his full salary for the entire year from the assessee-company. The Income-tax Tribunal upheld this rejection and further held that : "The salary, which was payable to Shri Sondhi, irrespective of the fact whether he remained in India or went abroad, cannot be treated as expenditure for performance of services outside India, and then there is no evidence on the record to suggest that any contract for the supply of goods outside India was executed. Shri Sondhi was also evidently not handling the export business as such of the assessee company. " Section 35B(1)(viii) allows that ty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of his being required to perform services outside India but the payment was to be made to him in his capacity as a working director. The third question, therefore, has to be answered in the negative and in favour of the Department. With regard to the reference at the instance of the Department the facts are that in respect of the two assessment years 1967-68 and 1974-75 interest under section 214 amounting to Rs. 9,320 and Rs. 34,666 was allowed on excess payment of advance tax. Subsequently, while giving effect to the order of the Appellate Assistant Commissioner, the Incometax Officer passed orders under section 154 of the Act withdrawing the interest of Rs. 3,170 and Rs. 2,224 as having been wrongly allowed to the assessee. The reas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court and the Calcutta High Court, at least, as to the meaning of the expression " regular assessment " occurring in section 214. This being so the provisions of section 154 could not be invoked and the mistake could not be regarded as one which is apparent on the face of the record. The Supreme Court in the case of Volkart Brothers [1971] 82 ITR 50 has categorically held that there can be no rectification if, on a point, two different opinions are possible. In view of the aforesaid decisions, this question of law must be answered in the affirmative and against the Department. To conclude we hold that the question referred at the instance of the Revenue is decided against it, whereas out of the three questions referred at the instanc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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