2007 (7) TMI 261

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....urt was delivered by MADAN B. LOKUR, J. - In this reference under Section 256(1) of the Income Tax Act, 1961, the following questions of law have been referred for our opinion:- "1. Whether on the facts and in the circumstances of the case, the proceedings commenced under Section 147(a) of the Income Tax Act are valid" 2. Whether on the facts and in the circumstances of the case, the Appe....

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.... Act, 1961 (for short the Act). 4. It is submitted by learned counsel for the assessee that in view of the decision of the Supreme Court in Commissioner of Income-tax v. Mafatlal Gangabhai and Co. (P) Ltd., (1996) 219 ITR 644, the questions that have been referred are now required to be answered in the negative, in favour of the assessee and against the Revenue. 5. In Mafatlal Gangabhai and ....

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....on a parity of reasoning, cash payments towards medical reimbursement fall outside the scope of Section 2(24)(iv) of the Act. We are in agreement with the view canvassed by learned counsel for the assessee. The use of the words "whether convertible into money or not" clearly relate to a benefit other than cash payment as held by the Supreme Court. Following Mafatlal Gangabhai and Co. (P) Ltd., (19....

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.... obligation " obligation of the employee " which would have been payable by the employee if it is not paid by the assessee. The payment by the assessee contemplated by these words is not evidently a payment to the employee but to a third party, no doubt, on account of the employee." 9. In the present case as well as in Mafatlal Gangabhai and Co. (P) Ltd., (1996) 219 ITR 644, the payment was mad....