1998 (4) TMI 42

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....NIAN J.--The question of law referred at the instance of the Revenue relating to the assessee's assessment year 1980-81 reads as under : "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the medical reimbursement and house rent allowance paid to the managing director and executives of the company should not be treated as remuneration f....

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.... held that the medical reimbursement and house rent allowance paid in cash cannot be considered as part of the salary in reckoning the disallowance under section 40(c) or 40A(5) of the Act. The Revenue, has challenged the order of the Appellate Tribunal and the question of law set out above has been referred to us for our consideration. In so far as the payment of house rent allowance to the ma....

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....0A(5) of the Act. The Supreme Court in the case of CIT v. Mafatlal Gangabhai and Co. (P.) Ltd. [1996] 219 ITR 644 has taken the view that the cash payment be treated as salary paid to the employees and will be subject to the ceiling prescribed under section 40A(5) of the Act though they cannot be regarded as a part of the perquisite for the purposes of section 40A(5) of the Act. The Appellate Trib....