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TMI Blog1989 (3) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... s ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that the amounts paid to the employees as reimbursement of medical expenses incurred by them did not result directly or indirectly in the provision of any perquisites to the employees within the meaning of section 40A(5) of the Income-tax Act, 1961 ? 3. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the sum of Rs. 36,936 paid by the assessee to British Oxygen Ltd., London, in pursuance of the agreement dated October 1, 1958, was a permissible deduction under section 37(1) of the Income-tax Act, 1961 ? 4. Whether, on the facts and in the circumstances of the case, the Tribunal was ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roperties. The Government of India provided a relief of 25 per cent. of the claim of the assessee subject to a certain condition that the assessee did not receive anything out of its claim for Rs. 1,40,511 from the Government of Pakistan. After adjusting the amount received from the Government of India, the assessee wrote off the balance of Rs. 1,05,406 as a bad debt. The Income-tax Officer disallowed the claim of the assessee for bad debt of Rs. 1,05,406 as premature. The Appellate Assistant Commissioner took the view that the debt had become bad as nothing had been recovered for the last 20 years and consequently he allowed the assessee's claim. Before us it is submitted by the learned representative of the Department that the assessee' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quently, due to the difference in the rates of the currencies, there was. profit of Rs. 1,73,877. The assessee claimed that it was not a revenue receipt. It was held that the amount of Rs. 30,721 was originally stock-in-trade. But when it was blocked and sterilised and the bank was unable to deal with the amount, it ceased to be its stock-in-trade and the increase in its value owing to exchange fluctuation was a capital receipt. In the present case also, we find that the assessee was not allowed to bring the amount to India and that no business was done thereafter 1949. Thus even if the amount was originally a part of the assessee's circulating capital, it ceased to be so. If the above decision applies to the facts of this case, then the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. Canara Bank Ltd. [1967] 63 ITR 328 (SC), the devaluation of the Indian rupee took place in the year 1949. At that time, the Karachi Branch of the bank did not carry on any business up to April 25, 1953. But in spite of the permission, the bank did not carry on any business and kept the amount blocked and sterilised. When the amount was ultimately brought back to India, the excess receipt on account of devaluation was held to be a capital receipt. But, in the instant case, the money has not been kept unutilised by the assessee of its own volition. It was a part of its circulating capital. The assessee was not permitted to deal with this amount because of various Government regulations. Therefore, it cannot be said on the facts of this c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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