2002 (8) TMI 48 - HC - Income Tax

Whether the assessee was entitled to investment allowance on the incremental cost by reason of foreign exchange fluctuation - whether in computing the amount of deduction admissible under rule 6D read with section 37(3), the ceiling should be applied to the aggregate of all the tours made by the persons during the previous year and not to individual tours - whether the expenditure incurred for reimbursement of medical expenses incurred by a director could be treated as part of remuneration for purpose of computing the disallowance under section 40(c). - whether part of the entertainment expenditure attributable to the staff of the assessee was to be excluded from the disallowance under section 37(2A) of the Act. Section 37(2A) of the Act was amended by adding Explanation thereunder by the Finance Act, 1983, with effect from April 1, 1976.

Summary

The High Court of Madras ruled on various questions regarding income tax appeals for the assessment year 1985-86. The court held that the assessee was entitled to investment allowance on foreign exchange fluctuation costs. It was also determined that the deduction under rule 6D should be applied separately for each travel undertaken by an employee. Additionally, reimbursed medical expenses for a director were considered part of remuneration for computing disallowance. Finally, entertainment expenditure attributable to staff was excluded from disallowance under section 37(2A) of the Act for the assessment year 1985-86.