COMMISSIONER OF INCOME TAX Vs. RAGHU SINHA

JUDGEMENT

(1.) ON an application under s. 256(1) of the IT Act, 1961 (hereinafter referred to as 'the Act, 1961'), the Income-tax Appellate Tribunal, Jaipur Bench, Jaipur (for short 'the Tribunal'), vide its order dt. 18th June, 1993, has referred the following question for the opinion of this Court :

(2.) DURING the period relevant to asst. yr. 1987-88, the assessee Shri Raghu Sinha was in the employment of M/s National Engineering Industries, Jaipur. In connection with the business of the employer the assessee left for USA on 30th Aug., 1986, and fell ill there. He was admitted in the hospital where he was to undergo coronary artery bypass surgery on 2nd Oct., 1986, and paid treatment expenses of Rs. 5,20,230. The expenditure incurred by the assessee was reimbursed by the employer-company with the permission of the Reserve Bank of India. The assessee has claimed before the AO that it is not a perquisite within the meaning given under s. 17(2) of the Act, 1961. The AO did not allow it as a deduction and held that it is a perquisite within the meaning of s. 17(2) of the Act, 1961. In appeal before the CIT(A), the CIT(A) held that the same was not taxable at all. In appeal before the Tribunal, Jaipur, the Tribunal relying upon the decision in the case of Mrs. Asha Golecha & Ors. vs. Asstt. CIT (1992) 44 TTJ (Jp) 156 : (1992) 42 ITD 7 (Jp) held that the medical expenditure incurred by the employee are reimbursed by the employer is not perquisite in the hands of assessee.

(3.) WHETHER the medical reimbursement amount of Rs. 5,20,230 is perquisite or not within the meaning of s. 17(2) of the Act, 1961, we have to see the provisions. The relevant sub-s. (2) of s. 17 of the Act, 1961, reads as under :