Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding
  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

TMI Blog

Home

1985 (9) TMI 125

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... the total salary paid to the Managing Director was Rs. 25,750 whereas perquisites were given to the tune of Rs. 10,526. The value of perquisites over the above 20per cent of the salary was to be disallowed which worked out to Rs. 5,376. These were disallowed accordingly. 3. Before the CIT (A) it was contended that the salary and perquisites, as provided under the IT Rules, did not exceed the limit of Rs. 72,000 which was available in the case of a Managing Director in view of the provisions, contained in s. 40 (c) of the IT Act, 1961. He, therefore, deleted the addition of the AO and contended that order. 4. The ld. Departmental Representative supported the order of the CIT (A) was erroneous. The ld. counsel for the assessee, on the .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ricted the same to Rs. 4,100 giving relief to the assessee at Rs. 10,336. 7. In the cross- objection by the assessee it has been stated that the CIT(A) has wrongly sustained the addition of Rs. 4,100 out of the salary and perquisites paid to Mr. Mullik. 8. The ld. Departmental Representative contended that in the ratio of the decision of the Kerala High Court CIT vs. Common Wealth Trust Ltd. (1982) 28 CTR (Ker) 311 (FB) : (1982) 135 ITR 19 (Ker) (FB), all allowances paid in cash were to be treated as perquisites and, therefore, the disallowances had rightly been made by the assessing officer. the ld. counsel for the assessee, on the other hand, referred to the judgment of the Kerala High Court in the case of CIT vs. Toshiba Anand Lamp .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... lowance as salary along with salary of Rs. 3600, the value of perquisites on account of medical benefits of Rs. 4534 beign less than 20per cent of the salary, in our opinion no disallowance was called for. The result is that ground of appeal by the Revenue is rejected and the cross objection by the assessee is allowed. 10. The third ground of appeal by the Revenue is that the CIT (A) has erred in deleting the addition of Rs. 5600 representing guest house expenses which were not allowable in view of he specific provision of s. 37 (5) of the IT Act, 1961. During the accounting period relevant to the assessment year under appeal, guest house expenses were claimed at Rs. 5600 being rent of the guest house. The assessee officer held that thes .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ed to deduction for the period from 1st Jan., 1979 to 31st March, 1979. 12. After hearing both the parties, we are of the opinion that in view of the amendment in s. 37 (5) with retrospective effect from 1st April, 1979, the expenses were not admissible. We, however, find force in the arguments made on behalf of the assessee that it is entitled to such deduction for the period 1st Jan., 1979 to 31st March, 1979. The assessing officer is directed to compute such expenses for this period and allow the same accordingly. 13. This finishes the appeal by the Revenue. Ground No. 1 of the cross-objection is against sustenance of disallowance of Rs. 2350 out of the sales promotion expenses. The assessing officer has observed that the entertain .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

 

 

 

 

Quick Updates:Latest Updates