TaxTMI 
TaxTMI 
1993 (3) TMI 18
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....n into account for the purpose of calculation of disallowance as perquisite under section 40A(5) of the Income-tax Act, 1961?" The facts relating to the question are that the assessee did not take into account the perquisite value in respect of the proportionate municipal taxes and repairing charges incurred by the assessee for the portion of the premises occupied by its employee, Shri H.P. Singhee. The Income-tax Officer disallowed Rs. 20,000 under section 40A(5) being the estimated value of perquisite in respect of proportionate municipal taxes and repairing charges incurred for the portion of the premises occupied by Shri H.P. Singhee. The disallowance was, however, deleted by the Commissioner of Income-tax (Appeals) in appeal. Aga....
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....69-70 onwards. While introducing section 40(a)(v), the Finance Minister mentioned in the Explanatory Note placed before Parliament the following as Objects and Reasons for introducing the provision "(2) Expenditure on providing perquisites, benefits or amenities to higher paid employees in businesses and professions. In the case of companies, the deductible amount of expenditure incurred by them in providing perquisites, benefits or amenities (subject to certain exceptions) to their higher paid employees is at present limited to 20 per cent. of the basic salary of each employee. It is proposed to extend this provision to non-corporate employers also and to bring within the purview of the limit any expenditure or allowance admissible t....
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....of construing the provision of section 40A(5) comprehensively to remedy the mischief it was meant to suppress. A mass of case law has evolved around the said provisions of section 40(c)(iii), section 40(a)(v) and section 40A(5) of the Act. Learned counsel for the Revenue relied upon the decision of the Bombay High Court in CIT v. Yorkshire Insurance Co. Ltd. [1986] 162 ITR 565. There, the issue was whether the depreciation in respect of the flat occupied by a director comes within the ambit of section 40(a)(v) as perquisite. The court observed that section 40 commences with the words "Notwithstanding anything to the contrary in sections 30 to 39". Thus, section 32 which deals with depreciation is also embraced by section 40. Section 32 p....
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....ell as section 40A(5) intends to fix a ceiling limit in some form or other. In that case, it has been held that the Tribunal was not right in allowing expenses for maintenance of the buildings beyond the limit specified in section 40(a)(v) for the period when that provision was in force. In the case of Harrisons and Crossfield (India) Limited v. CIT [1990] 183 ITR 614, the Kerala High Court held that, on a reading of section 40(a)(v) or section 40A(5) of the Income-tax Act, the entire expenditure incurred by the assessee for the maintenance of the building given for residence of its employees and the depreciation thereon can be taken into account for the purpose of disallowance under section 40(a)(v)/40A(5). Learned counsel for the asses....
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....t, 1968, with effect from the assessment year 1969-70. According to him, the implication of the subsequent amended provisions in a broader form as contained in section 40A(5) did not fall for consideration by this court and is, therefore, not of any assistance to the point at issue. He sought to derive support from certain observations of this court in CIT v. Ashoka Marketing Ltd. [1990] 181 ITR 493. The facts in that case were, however, altogether different. The house rent was paid by the company for the flats provided to the executives. The actual rent paid by the company for the flats was known and ascertained. This court, in that context, observed that, in such cases, rule 3 of the Income-tax Rules, 1962, can have no manner of applicati....