1999 (8) TMI 15

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....xpenses, free use of car for personal purpose and reimbursement of telephone expenses installed at their residence. In the course of assessment proceedings, the assessee claimed that the payment of insurance for accident policy, reimbursement of telephone expenses at the residence and medical reimbursement expenses were not perquisite for the purpose of section 40A(5) of the Income-tax Act (hereinafter referred to as "the Act"). The assessee incurred expenses of Rs. 1,08,877 on issue of bonus shares and claimed allowance thereof as revenue deduction. The Income-tax Officer disallowed the same as a capital expenditure on the ground that the issue of bonus shares can be treated towards the basic structure of the company and the expenditure....

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....3,229 paid by the assessee to Mettur Beardsell Ltd., Madras, was an allowable deduction on the facts and in the circumstances of the case ?" ITR No. 377 of 1984 : This reference pertains to the assessment years 1977-78 and 1978-79. On the same grounds stated hereinabove in paragraph 2.3 above (but with the change of amounts and years), the following question was referred to this court : "Whether, on the facts and in the circumstances of the case, the assessee was entitled to deduction of Rs. 1,79,752 and Rs. 2,01,185 being the amounts paid to Mettur Beardsell Co. Ltd., for the user of its trade mark, namely, 'tebilized' in the assessment years 1977-78 and 1978 (1978-79 sic) respectively ?" Similarly, for the same grounds stat....

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....rred on cash reimbursement of medical expenses to the managing director would fall within sub-clause (i) of clause (c) of section 40 and not under section 40A(5)(a) under which only expenditure incurred on a person in his capacity of an employee could be computed where such employee is also a director." Similar questions are raised in the aforesaid references. In view of the aforesaid view expressed by the court earlier, the answer must be in positive and in favour of the Revenue so far question No. 1 in ITR No. 315 of 1984 and question No. 2 in ITR No. 377 of 1984 are concerned. Question No. 2 in ITR No. 315 of 1984 : So far as question No. 2 in ITR No. 315 of 1984 is concerned, on an identical question in the case of CIT v. Ajit ....