1998 (6) TMI 81 - HC - Income Tax

Summary

Issues:
1. Depreciation and investment allowance on technical know-how.
2. Entitlement to investment allowance on weighing scale and mobile crane.
3. Treatment of reimbursement of medical expenses as 'perquisites'.

Analysis:
1. The court addressed the issue of allowing depreciation and investment allowance on technical know-how, holding it to be in the nature of a plant. The court referred to a previous decision and ruled in favor of the assessee based on established legal precedents.

2. The main dispute revolved around the entitlement of the assessee to investment allowance under section 32A(2)(b)(iii) of the Income-tax Act for a weighing scale and mobile crane used in the business of manufacturing special alloys. The court established that the weighing scale and mobile crane were indeed used for the manufacturing business, meeting the requirements of the Act. The court rejected the Revenue's argument of lack of evidence, stating that it was obvious from the nature of the business that the machinery was used for manufacturing purposes. Consequently, the court ruled in favor of the assessee, emphasizing that remitting the matter to the Tribunal would be unnecessary.

3. Regarding the reimbursement of medical expenses to employees, the court found that it could not be treated as 'perquisites' under section 40A(5) of the Income-tax Act. The decision was based on previous rulings by the court and the Supreme Court, leading to a favorable outcome for the assessee.

In conclusion, the court resolved the issues in favor of the assessee based on legal interpretations and factual considerations, providing a detailed analysis for each question referred by the Income-tax Appellate Tribunal.