Cash allowances are not a benefit, amenity or perquisite for disallowance under section 40(c)(iii), favouring the assessee.

Cash allowances such as fixed monthly allowance, bonus, incentives, car allowance and house rent allowance were held not to fall within the expression "benefit, amenity or perquisite" for disallowance under section 40(c)(iii) of the Income-tax Act, 1961. Applying its earlier binding view, the Bombay HC answered the question in the negative and in favour of the assessee, so these cash payments were outside the disallowance provision.

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Issues: Whether cash allowances such as fixed monthly allowance, bonus, incentives, car allowance and house rent allowance are to be treated as a benefit, amenity or perquisite for the purpose of disallowance under section 40(c)(iii) of the Income-tax Act, 1961.

Analysis: The issue was answered in the light of the binding view previously taken by the Court that cash allowances do not fall within the expression benefit, amenity or perquisite for the purpose of section 40(c)(iii). The question, therefore, required a negative answer.

Conclusion: The answer was in the negative and in favour of the assessee.

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