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TMI Blog2018 (10) TMI 725X X X X Extracts X X X X X X X X Extracts X X X X ..... dia by its employer as per section 17(2(v) of the Act. The AO treated the said amount in excess of Rs. 15000/- as perquisite in terms of section 17(2)(iv) of the Act in the hands of said employee. The AO invoked the provisions of section 192 and held that the assessee is liable to deduct TDS @ 30% and added an amount of Rs. 57,96,300/- to the total income of the assessee. 4. Further, the ld.DR submits, that the said expenditure on medical expenses and stay abroad of an employee shall be excluded from perquisite only to the extent permitted by RBI. The assessee could not produce any permission issued by RBI in respect of said medical treatment in a foreign hospital. The assesse produced a copy of RBI Circular before the CIT-A and basing on which the ld. CIT-A held that RBI allowed remittance of medical expenses of the amount and rejected the view of AO. Further, he held there was no RBI permission required and the assessee is not liable for deduction of TDS u/s. 192 of the Act. The ld. DR also submits that the assessee failed to submit any evidence showing the permission from RBI to the extent of said medical expenditure. The documents filed before the CIT-A in the first appellate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act and the expenditure on medical treatment and stay abroad cannot be perquisite in the hands of the assessee to the extent permitted by the RBI. 8. Heard rival submissions and perused the record. The ld. AR produced master circular on miscellaneous remittances from Indiafacilities for residents updated as on June 13, 2012 issued by RBI to all authorized persons in foreign exchange, which explains the authorized dealers may release foreign exchange upto an amount of US$ 100000 or its equivalent on the basis of self declaration towards medical treatment outside India without insisting on any estimate from a hospital/doctor. "A.3 Medical Treatment 3.1 With a view to enable residents to avail of foreign exchange for medical treatment abroad without any hassles and any loss of time. Authorised Dealers may release foreign exchange up to an amount of USD 100,000 or its equivalent, on the basis of self declaration that the applicant is buying exchange for medical treatment outside India, without insisting on any estimate from a hospital/doctor. 3.2 For amount exceeding the above limit, estimate from the doctor in India or hospital/doctor abroad, is required to be submitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resent case. 12. Further, the ld.AR placed on record Circular No. 603 dt. 6-6- 1991 issued by the CBDT, which is reproduced herein below:- " In supersession of Circular No. 376, dated 6th January, 1984, Circular No. 445, dated 31st December, 1985, Circular No. 481, dated 20th February I .; 987 (reproduced below) and all other instructions on the subject, the Board have decided that the value of the perquisite arising by way of payment or reimbursement by an employer of expenditure on medical treatment incurred by his employee on himself or on his spouse, children or parents, including the provision of free medical treatment or treatment at a concessional rate, will not be included in the taxable salary of the employee in the following cases: (i) Where the medical treatment is availed of at hospitals. Clinics, etc. maintained by the employer; (ii) Where the medical treatment is availed of at hospitals maintained by the Government of local authorities or hospitals approved for the purposes of the Central Government Health Scheme or Central Medical Scheme ( a list of such hospitals furnished by the Ministry of Health and Family Welfare on 11th April, 1991 is annexed). (iii ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6.4 The question whether TDS is liable to be effected has to be answered in either case of whether S.K. Dugar may be rightly treated as an employee or director in so far as large sum of Rs. 1,93,36,obo has been paid on his medical treatment abroad. It does appear that Mr. Dugar might have been shown as an employee to avoid treating the said huge amount as income taxable in his hand. 'But the AO has proceeded in the assessment order by treating him a bonafide employee and has applied Proviso to Section.17(2)[after clause-(viii)]. Accordingly the medical treatment expenses in excess of Rs. 15,000 has been treated as taxable perquisite in the hands of recipient employee Mr. S. K. Dugar. The AO has discussed the provision of Proviso (v) to subsection 17(2), in case of medical treatment outside India, and has not given benefit to the employee on the ground that RBI exemption permission was not shown to the AO by the appellant inspite of the AO's requisition to that effect. 6.4.1. The appellant's claim is that in terms of RBI circular expenses of employee treatment abroad did not attract specific permission as RBI permits such remission automatically. A copy of the relevan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... debit and credit entries were passed on the same date i.e. 14-12-2012 and no interest was drawn, which was actually receivable by the assessee and no TDS is applicable. The assessee received interest of Rs. 85,14,711/- and paid interest of Rs. 67,92,425/- resulting net interest of Rs. 18,12,286/- Further, the ld. AR submits without prejudice to the above submission that firm, Convent Height Developers taken into consideration such sum being interest paid by the assessee in computing its income in the return of income and paid the tax thereon and the assessee cannot be held to be default for non deduction of tax. 19. Heard rival submissions and perused the material available on record. It is claimed that there is netting of interest of Rs. 18,2,2826/-, which was taken into account by the Convent Height Developers in its return of income. But, however, no evidence or whatsoever was produced before us to show that said sum was taken into consideration as its income in its accounts and therefore, we deem it proper to remand the matter to the file of AO for his examination. The assessee shall produce the details of accounts in respect of said firm before the AO to prove that the said ..... X X X X Extracts X X X X X X X X Extracts X X X X
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