Bombay H.C : Whether, on the facts and in the circumstances of the case, the cash payments by the assessee to its employees towards house rent allowance in accordance with the service agreement would fall within the purview of the expression ‘perquisite’ contained in s. 40(a)(v) of the IT Act, 1961 ?

High Court Of Bombay

CIT vs. Mansants Chemicals (P.) Ltd.

Section 40(a)(v)

S.P. Bharucha & T.D. Sugla, JJ.

IT Ref. No.109 of 1976

22nd November, 1988

Counsel Appeared

Jetly, Mrs. M. Singh & K.C. Sidhwa, for the Revenue : N.A. Dalvi, i/b M/s. Crawford Bayley & Co., for the Assessee

D. SUGLA, J.:

The only question of law raised in this reference at the instance of the Revenue is : “Whether, on the facts and in the circumstances of the case, the cash payments by the assessee to its employees towards house rent allowance in accordance with the service agreement would fall within the purview of the expression ‘perquisite’ contained in s. 40(a)(v) of the IT Act, 1961 ?”

Counsel are agreed that in view of this Court’s decision in the case of CIT vs. Indokem (P) Ltd. (1981) 22 CTR (Bom) 268:(1981) 132 ITR 125(Bom), which was followed in the case of CIT vs. Mercantile Bank Ltd. (1987) 63 CTR (Bom) 79:(1988) 169 ITR 44 (Bom), the question is required to be answered in the negative and in favour of the assessee.

The question is accordingly so answered. No order as to costs.

[Citation : 177 ITR 204]

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