2001 (8) TMI 83

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.... J.-In this reference at the instance of the Revenue, the Income-tax Appellate Tribunal has referred the following questions for our determination arising out of I.T.A. No. 1347/Ahd of 1985 in respect of the assessment year 1984-85: "(1) Whether in law and on facts, the Tribunal is right in holding that medical benefit and house rent allowance to the managing director cannot be considered, for ....

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....ive, i. e., in favour of the Revenue and against the assessee. In so far as the controversy about the house rent allowance is concerned, the same is concluded in favour of the assessee and against the Revenue inasmuch as in CIT v. Mafatlal Gangabhai and Co. P. Ltd. [1996] 219 ITR 644, the apex court has held that the cash payment by an assessee to his/its employees do not fall within the ambit ....

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....n cash cannot be considered for the purpose of disallowance under section 40(c) of the Act. Hence, the second part of question No. 1 is required to be answered in the affirmative, i. e., in favour of the assessee and against the Revenue. As regards question No. 2 pertaining to cash payment of special duty allowance of Rs.16,611 to the employees, in view of the aforesaid principle laid down by t....

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....see. Accordingly, the Commissioner of Income-tax was justified in deleting the addition of Rs.4,750 made by the Income-tax Officer. In view of the above discussion, question No. 3 is also required to be answered in the affirmative, i. e., in favour of the assessee and against the Revenue. In the result, the second part of question No. 1 (pertaining to house rent allowance) and questions Nos. 2 ....