9911796707
TMI Blog1993 (9) TMI 92X X X X Extracts X X X X X X X X Extracts X X X X ..... ioners and refrigerators cannot be taken into account ?" The relevant assessment year is assessment year 1974-75. The assessee is a company. It owns a Duplex flat in the building known as II-Palazzo, Malabar Hill, Bombay-6, covering an area of 2,840 sq. ft. During the relevant previous year in terms of the resolution of the board of directors of the company dated May 30, 1972, on and from July 1, 1972, a portion of the said flat comprising one bed room with common use of drawing and dining room was allowed to be used by one of its directors, Shri A. V. Birla. The area of the portion occupied by Shri Birla was one-third of the total area of the flat. While making assessment of the company for determining the salary, allowances, etc., paid t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heard learned counsel for the parties and considered their rival submissions. Section 40A, so far as relevant, as it stood at the material time reads : "Section 40A(1) The provisions of this section shall have effect notwithstanding anything to the contrary contained in any other provision of this Act relating to the computation of income under the head "Profits and gains of business or profession"..... (5)(a) Where the assessee, (i) incurs any expenditure which results directly or indirectly in the payment of any salary to an employee or a former employee, or (ii) incurs any expenditure which results directly or indirectly in the provision of any perquisite (whether convertible into money or not) to an employee or incurs directly or in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 36 ; (iv) any expenditure referred to in clause (ix) of sub-section (1) of section 36. . . . (c) The limits referred to in clause (a) are the following, namely: (i) in respect of the expenditure referred to in sub-clause (i) of clause (a), in the case of an employee, an amount calculated at the rate of five thousand rupees for each month or part thereof comprised in the period of his employment in India during the previous year, and in the case of a former employee, being an individual who ceases or ceased to be the employee of the assessee during the previous year or any earlier previous year, sixty thousand rupees : Provided that ... (ii) in respect of the aggregate of the expenditure and the allowance referred to in sub-cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lied). The material words used in section 40(a)(v) and in section 40A(5)(a)(ii) on this aspect are identical. The expression used in section 40A(5)(a)(ii) is also "any allowance in respect of any assets of the assessee used by the employee . . . ... The two expressions being identical, the interpretation given by this court in the above referred decision squarely applies to the present case. We are, therefore, of the clear opinion that though depreciation on furniture, flat, air-conditioners and refrigerators cannot be treated as an expenditure resulting in the provision of any perquisite, it is liable to be considered as an allowance in respect of the assets of the assessee used by the employee. In that view of the matter, it will fall H w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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