High Court Guides Tribunal on Deductibility of Revenue Expenditure & Cash Reimbursement Treatment

The High Court directed the Tribunal to refer two questions for decision regarding deductibility of revenue expenditure and treatment of cash reimbursement of expenses as a perquisite for disallowance under section 40A(5). The court deemed the third question a factual matter without legal implications.

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The High Court of Delhi directed the Tribunal to refer two questions for decision: 1) Whether the amount paid to M/s. Industrial Development Services Pvt. Ltd. is a deductible revenue expenditure, and 2) Whether cash reimbursement of expenses could be treated as a perquisite for disallowance under section 40A(5). The court found the third question to be a question of fact and did not see any legal issue arising from it.

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