2003 (4) TMI 69

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....oner of Income-tax (Appeals) taking the view that the medical expenditure amounting to Rs. 5,20,230 reimbursed to the assessee being in the employment of National Engineering Industries Ltd., Jaipur, was not treatable as a perquisite in the hands of the assessee under section 17 of the Income-tax Act, 1961?" During the period relevant to the assessment year 1987-88, the assessee, Shri Raghu Sinha, was in the employment of National Engineering Industries, Jaipur. In connection with the business of the employer, the assessee left for the USA on August 30, 1986, and fell ill there. He was admitted in the hospital where he was to undergo coronary artery bypass surgery on October 2, 1986, and paid treatment expenses of Rs. 5,20,230. The ex....

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....year 1987-88, the Tribunal has committed error in holding that it is not perquisite within the meaning of section 17(2) of the Act, 1961. Mr. Mahendra Gargiey, learned counsel appearing for the assessee, on the other hand, submits that whether the medical expenses reimbursed by the employer should be treated as benefit or as amenity provided by the employer to the employee under section 40A(v) and payment made in cash whether it is covered by section 40(a)(v) or section 40A(5) of the Act, 1961, has been considered by the apex court in CIT v. Mafatlal Gangabhai and Co. (P.) Ltd. [1996] 219 ITR 644 and the apex court has taken a view that in case the reimbursement to an employee, the payment made by the employer contemplated by these words....

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....of; (b) by a company to an employee being a person who has a substantial interest in the company; (c) by any employer (including a company) to an employee to whom the provisions of paragraphs (a) and (b) of this sub-clause do not apply and whose income under the head 'Salaries', (whether due from, or paid or allowed by, one or more employers), exclusive of the value of all benefits or amenities not provided for by way of monetary payment, exceeds fifty thousand rupees." Sub-clause (iii) of clause (2) of section 17 of the Act, 1961, provides that the value of any benefit or amenity granted or provided free of cost or at concessional rate in any of the following cases, i.e., to an employee by a company, by a company to an employee ha....