2008 (9) TMI 315

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..../83 and 275/Chandi/83: I. T. A. No. 275/Chandi/83 (by the Revenue) 1. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that the medical expenses by way of payment of premium towards group medical insurance scheme and reimbursement of medical expenses, electricity, water and gas charges shall not be treated as perquisite while computing disallowance under section 40(c)/40A(5) of the Income-tax Act, 1961? 2. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that the provisions of clause (c) of sub-section (5) of section 40A shall not apply for restricting the allowance in respect of salary and perquisite paid by ....

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.... the Assessing Officer by treating the same as perquisite under section 40(c)/40A(5) of the Act. The Commissioner of Income-tax (Appeals) allowed the claim of the assessee which was affirmed by the Tribunal. The assessee also made a claim under section 32A in respect of the amount spent for construction of roads within the factory premises by claiming the said expenditure the part of investment on plant for the purpose of investment allowance under section 32A of the Act, which claim was disallowed by the Assessing Officer but was allowed by the Commissioner of Income-tax (Appeals) and affirmed by the Tribunal. Re: Q. No. (1) (by the Revenue) 3. Learned counsel for the assessee relies on the judgment of the hon'ble Supreme Court in CI....

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.... Co. [1993] 204 ITR 412 ; [1994] Supp (1) SCC 280, reiterated in Builders Association of India v. Union of India [1994] 209 ITR 877, it was held that construction of roads was not covered by section 32A of the Act. 10. Accordingly, we answer the question in favour of the Revenue. R. Q. No. 1 (by the assessee) 11. Learned counsel for the assessee fairly stated that the matter is covered against the assessee by the judgment of the hon'ble Supreme Court in Smith Kline and French (India) Ltd. v. CIT [1996] 219 ITR 581, wherein it was held that the assessee will not be entitled to deduction of surtax in arriving at the taxable income. 12. In view of the above, the question is answered against the assessee and in favour of the Revenue....