1988 (10) TMI 30

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.... is a reference at the instance of the Revenue and the Income-tax Appellate Tribunal, Bombay Bench "D", has referred to us the following two questions for our consideration : "(1) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the cash payments made by the assessee-company to its employees in the form of car allowance, ex gratia payments, ....

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....rs 1967-68 and 1968-69. The assessee-company is a manufacturer of carbon paper, typewriter ribbons, etc. The dispute related to the disallowance under section 40(c)(iii) of the Income-tax Act, 1961, as it was in force in the relevant years. The statutory provisions have been extracted in paragraph 2 of the statement of case and need not be repeated here. In the assessment for the year 1967-68, the....

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....nced before the Tribunal and the conclusions of the Tribunal are indicated in paragraphs 5 and 6 of the statement of case. It would be sufficient for our purposes to observe that on both the points canvassed by the Departmental representative, the Tribunal found in favour of the assessee. Aggrieved by the said decision of the Tribunal, reference was sought for and made. As far as question No. (....

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....ered allowances have been set up as being payable to the employee, thereby showing that the parties understood all these payments as coming within the scope of salary to the employee. We would, therefore, confirm his direction in this regard also." In our opinion, the Tribunal has adopted a proper and reasonable approach and there is no warrant for considering "salary" in a restricted or unreal....