High Court rules driver's salary not disallowed under Income Tax Act section 37(3A).

The High Court of Madras dismissed the tax case petition, ruling that the driver's salary should not be included in the disallowance under section 37(3A) of the Income Tax Act. The Court upheld the Tribunal's decision that the driver's salary does not fall under the specified expenditure categories for disallowance as it does not pertain to the maintenance of motor cars as per section 37 of the Act. The petition was not deemed referable, and no costs were awarded.

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Issues involved: Interpretation of section 37(3A) of the Income Tax Act regarding the inclusion of driver's salary in the disallowance.

In this case, the High Court of Madras addressed a tax case petition brought by the Commissioner of Income Tax, Tamil Nadu-11, Madras, seeking a direction to the Tribunal to refer a question of law. The question pertained to whether the driver's salary should be considered in the disallowance under section 37(3A) of the Income Tax Act. The Tribunal and the Court both agreed that the driver's salary does not fall under the expenditure categories specified in the Act for disallowance. The Court upheld the Tribunal's view that the driver's salary cannot be included in the maintenance of motor cars as per the provisions of section 37 of the Act. Therefore, the petition was dismissed as the question was not deemed referable and no costs were awarded.

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