1997 (12) TMI 53

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..... ome-tax Appellate Tribunal, at the instance of the assessee, for our consideration : "1. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in holding that the reimbursement by the applicant of the medical expenses incurred by its managing director and also treating cash payment like house rent allowance paid to the managing director as part of .....

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..... assessee-company should be taken into account for the purpose of determining the amount of disallowance under section 40(c)(iii) of the Income-tax Act, 1961 (hereinafter referred to as the "Act"). A similar question whether those amounts are liable to be included for the purpose of determining the ceiling under section 40(c) of the Act came up for consideration before this court in Rane (Madras) L .....

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..... g the ceiling under section 40A(5) of the Act. The decision of the Supreme Court in the case of CIT v. Mafatlal Gangabhai and Co. (P.) Ltd. [1996] 219 ITR 644, makes it clear that the cash payment will have to be treated as salary paid to the employees and will be subject to the ceiling limit provided under section 40A of the Act. Following the decision of the Supreme Court cited supra, we hold th .....

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