9911796707
TMI Blog1998 (4) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... he company, salary paid to watchman, maintenance of vehicles and depreciation thereon and personal accident insurance premium payments, etc., cannot be treated as perquisites for the purposes of disallowance under section 40(c)/40A(5) of the Income-tax Act, 1961, and hence the disallowance made on the basis of these expenses as forming part of the perquisites should be deleted ? (2) Whether, on the facts and in the circumstances of the case, the deposit of Rs. 2,12,821, made by the assessee on March 15, 1977, with the industrial Development Bank of India under the Companies Deposits (Surcharge on Income-tax) Scheme, 1976, qualifies for the reduction of surcharge on income-tax within the scope of the proviso to section 2(1)(b) of the Finan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the capacity of an employer. The reasoning which applies to taxes on buildings would equally apply to rates also. Following the earlier judgment of this court in T. C. Nos. 1149 and 1150 of 1988, dated April 2, 1998 (South India Corporation Agencies P. Ltd. v. CIT [1999] 239 ITR 305), we hold that the expenses like rates and taxes paid in respect of the buildings and the vehicles owned by the company would be outside the purview of sections 40(c) and 40A(5) of the Income-tax Act. The next item that is the subject-matter of salary paid to watchman. This court in T. C. No. 169 of 1984, dated February 11, 1997 (CIT v. T. V. Sundaram Iyengar and Sons [1999] 235 ITR 491), has taken the view that the salary paid to the watchman would be rega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the policy was taken by the employer for its own benefit, and the employees have no right to claim the money from the insurance companies. Though the Appellate Tribunal has not discussed the terms of the policy, it is stated that under the terms of the policy the employees have no right to claim the money from the insurance companies. Following the judgment in T. C. No. 169 of 1984, dated February 11, 1997 (CIT v. T. V. Sundaram Iyengar and Sons [1999] 235 ITR 491), we hold that the Tribunal was correct in holding that the personal accident insurance premium payments cannot be treated as perquisites for the purposes of disallowance under sections 40(c) and 40A(5) of the Act. In the result, we answer the first question of law referred t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad made, during the financial year commencing on the first day of April, 1976, any deposit with the Industrial Development Bank of India under the Companies Deposits (Surcharge on Income-tax) Scheme, 1976, the surcharge on income-tax payable by the company shall be reduced to the extent of the deposit. Admittedly, the sum of Rs. 2,12,821, was made by the company on March 15, 1977, and the deposit was made before the end of the financial year which ended on March 31, 1977. Thus, the assessee had satisfied the requirements of the proviso to section 2(1)(b) of the Finance (No. 2) Act, 1977, and as the statutory conditions are complied with by the assessee-company, the assessee is eligible to get the credit for the deposit made by the company w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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