National and Grindlays Bank Ltd. Vs. Commissioner of Income-tax - Court Judgment

Excerpt:
- s.c. sen, j.1. three questions have been referred by the tribunal under section 256(1) of the income-tax act, 1961 ('the act') : '1. whether, on the facts and in the circumstances of the case, the tribunal is correct in holding that the reimbursement of medical expenses by the assessee to its employees did not result in the provision of any benefit, amenity' or perquisite within the meaning of section 40(a)(v) of the income-tax act, 1961, and is not liable to be taken into account in computing the disallowance to be made under section 40(a)(v) 2. whether, on the facts and in the circumstances of the case, the tribunal is correct in holding that the appellate assistant commissioner was not justified in allowing the assessee's claim for deduction of rs. 21,60,000 in full on the basis of the circular no. 6-p(lxxvi-66) of 1968, dated july 6, 1968, issued by the central board of direct taxes and in directing the appellate assistant commissioner to consider the assessee's claim afresh in the light of section 40a(3) of the income-tax act, 1961 3. whether, on the facts and in the circumstances of the case, the tribunal was justified in law in allowing the relief under section 80m of the income-tax act, 1961, on the net amount of dividend and not on the gross amount of dividend received by the assessee and in remanding the case on that ground ?' 2. question no. 1 has been referred at the instance of the revenue and questions nos. 2 and 3 have been referred at the instance of the assessee under section 256(1). so far as question no. 1 is concerned, the dispute is about the deductibility of reimbursement of medical expenses provided by the assessee-company. this controversy has been gone into and decided by this court in the case of cit v. kanan devon hills produce co. ltd. : [1979]119itr431(cal) . it was held that the expression 'benefit, amenity or perquisite' in section 40(a)(v) of the act could not include cash payment. this judgment of this court has been followed in the assessee's own case in respect of an earlier assessment year in cit v. national and grind-lays bank ltd. : [1984]145itr457(cal) . 3. in the case of cit v. commonwealth trust ltd. : [1982]135itr19(ker) , a full bench of the kerala high court has taken a contrary view. the judgment of this court in the case of kanan devan hills produce co. ltd. : [1979]119itr431(cal) and also similar other judgments of the other high courts were considered in that case. 4. since there is a judgment of this court which has been followed by the other benches of this court in a number of cases, we answer question no. 1 in the affirmative and in favour of the assessee. so far as question no. 2 is concerned the same is not pressed and, therefore, we decline to answer question no. 2. so far as question no. 3 is concerned, since the case has gone back on remand, the assessee does not want to press this question also at this stage. so, we decline to answer question no. 3. 5. since there are conflicting judgments of the two high courts on question no. 1, this case is certified as fit for appeal to the supreme court under section 261 of the act. let a certificate be issued separately. 6. there will be ho order as to costs.bhagabati prasad banerjee , j.7. i agree.