LAWS(MAD)-1997-12-72

SUNDARAM CLAYTON LIMITED Vs. COMMISSIONER OF INCOME TAX

Decided On December 02, 1997
SUNDARAM CLAYTON LTD. Appellant
V/S
COMMISSIONER OF INCOME-TAX Respondents

JUDGEMENT

(1.) THE following three questions have been referred by the Income-tax Appellate Tribunal, at the instance of the assessee, for our consideration :

(2.) IN so far as the first question of law referred to us is concerned, the Appellate Tribunal held that the reimbursement of medical expenses and house rent allowance paid to the managing director of the assessee-company should be taken into account for the purpose of determining the amount of disallowance under section 40(c)(iii) of the INcome-tax Act, 1961 (hereinafter referred to as the "Act"). A similar question whether those amounts are liable to be included for the purpose of determining the ceiling under section 40(c) of the Act came up for consideration before this court in Rane (Madras) Ltd. v. CIT [1995] 212 ITR 583. This court held that the house rent allowance, sitting fees and reimbursement of medical expenses should be taken into account for the purpose of section 40(c) of the Act. Recently, following the said judgment, we have in T.C. Nos. 388 to 392 of 1984 - Sundaram INdustries Ltd. v. CIT [1999] 239 ITR 405 - by judgment dated November 26, 1997, held that the reimbursement of medical expenses should be taken into account for the purpose of section 40(c) of the Act. Following the earlier judgments of this court, we answer the first question of law referred to us in the affirmative and against the assessee.