SUNDARAM FINANCE LIMITED Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) SUNDARAM Finance Limited, is the assessee at whose instance three questions have been referred to this court.

(2.) AS far as the expenditure in the first question, viz., medical reimbursement and house rent allowance are concerned, they have got to be treated as part of salary and the assessee cannot have exemption under Section 40A(5) of the Income-tax Act, 1961. In fact, this question has already been answered by this court in Sunda0ram Clayton Ltd. v. CIT [1999] 239 ITR 416. In that case also the question of medical reimbursement and house rent allowance came up for consideration before this court and it was held that the cash payment like house rent allowance and medical reimbursement paid to the employees should be treated as salary for the purposes of determining the ceiling under Section 40A of the Act. The very same question is involved in this case also. Therefore, as far as the expenditure involved under these two heads is concerned the question is answered in favour of the Revenue and against the assessee.

(3.) THE question has also been answered in favour of the Revenue and against the assessee. Applying the ratio of the said decision, we also answer this question in favour of the Revenue and against the assessee.