COMMISSIONER OF INCOME-TAX Vs. D.P. KANODIA

JUDGEMENT

(1.) THE Income -tax Appellate Tribunal, Allahabad, has referred the following question of law under Section 256(1) of the Income -tax Act, 1961 (hereinafter referred to as 'the Act'), for opinion to this court: Whether, on the facts and in the circumstances of the case, the Tribunal is correct in law in holding that the reimbursement of medical expenses to an employee being the director of the company, is not 'perquisite' within the meaning of Section 17(2)(iii)(a) of the Income -tax Act, 1961?

(2.) THE present reference relates to the assessment year 1990 -91. Briefly stated the facts giving rise to the present reference are as follows: The assessee an individual by status, is a director in a public limited company drawing salary of Rs. 24,000 per annum in addition to rent free accommodation and certain other perks.

(3.) THE Assessing Officer did not agree with the assessee's contention that the expenses although allowed on the strength of a resolution of the board of directors could not be permitted to the assessee even on humanitarian grounds and it was not obligatory on the part of the employer to bear such expenses. He, therefore, taxed the amount in question in the hands of the assessee by treating the same as a perquisite in terms of provisions of Section 17(2)(iii)(a) of the Income -tax Act, 1961, also confirmed during first appeal.