Employer reimbursements and insurance premium payments were held outside perquisite treatment, leaving no referable question of law.

Reimbursement of medical expenses and payment of insurance premium by an employer were held not to constitute a perquisite under section 40(c), because cash allowance or reimbursement for medical expenses and house rent does not fall within sub-clauses (i) to (v) of clause (b) of Explanation 2. The court applied its earlier binding decisions and treated the proposed issue as already settled. As no live question of law remained for consideration under section 256(2), the reference petition was dismissed.

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Issues: Whether reimbursement of medical expenses and payment of insurance premium to an employee could be treated as a perquisite for the purpose of disallowance under section 40(c) of the Income-tax Act, 1961, and consequently whether any referable question of law arose for consideration under section 256(2).

Analysis: The Court followed its earlier decisions holding that cash allowance or reimbursement paid by an employer towards medical expenses or house rent does not constitute a perquisite. It further held that such payments do not fall within sub-clauses (i) to (v) of clause (b) of Explanation 2 and, therefore, cannot be treated as perquisites at all. In view of this settled position, the proposed question stood concluded by binding precedent and did not present a live referable question of law.

Conclusion: No referable question of law arose and the petition for reference was dismissed.

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