(1.) THIS is a consolidated reference both at the instance of the Revenue as well as at the instance of the assessee relating to the assessment years 1975-76 and 1976-77. The questions of law referred at the instance of the assessee are as under :
(2.) WHETHER the Tribunal is justified in law in holding that the expenses incurred by the assessee-company in reimbursement of medical expenses of one of its, directors is liable to be treated as perquisites enjoyed by the director and that it is liable to be disallowed under Section 40(c) of the Act ?
(3.) MR. S.A. Balasubramanian, learned counsel for the assessee, reiterated before us the same contentions that were urged before the Appellate Tribunal. We are of the view that the finding of the Appellate Tribunal that the motor cars were used if not wholly, at least partly for the personal purposes of the directors does not give rise to any question of law, and it is only on the appreciation of the facts and taking into account the nature of the assets, the Appellate Tribunal has recorded a finding that the cars have been used at least partly for the personal purposes of the directors. The assessee has not placed any material before the Tribunal to show that the cars were not even partly used for personal purposes and in the absence of any material or evidence, the Appellate Tribunal was justified in coming to the correct conclusion in holding that the provisions of Sub-clause (ii) of Clause (c) of Section 40 of the Act were attracted to the facts of the case. The onus is on the assessee to prove that the assets were not used even partly for the personal purposes of the directors and the assessee has not discharged the burden. Therefore, we hold that the Tribunal has come to a correct conclusion in holding that the motor cars were used if not wholly, at least partly for the personal purposes of the directors and maintenance expenditure of the cars should be taken into account for the purpose of disallowance under Section 40(c) of the Act.