Income Tax Reference v. Mafatlal Industries Ltd

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICGTION INCOME TAX REFERENCE NO. 76 of 1990The Commissioner of Income Tax ... Applicant. vs. Mafatlal Industries Ltd., ... Respondent Mr. Ashok Kotangale for Applicant. . CORAM: V. C. DAGAAND A. S. AGUIAR JJ. Date: 6[th] July, 2005. P.C. 1. The question of law referred to under section 256(1) of the Income-tax Act for consideration of this court by the Tribunal at the instanceof the revenue are as follows:tax Act for consideration of this court by the Tribunal at the instanceof the revenue are as follows: (1) Whether on the facts and in the circumstances of thecase, the Tribunal was right in law in holding that theexpenditure incurred by the assessee in respect of (i)premium or deferred annuity policy (ii) premium in respect of personal accident insurance, (iii) premium inrespect of medical insurance and (iv) reimbursement of medical expenses should not be considered as benefitor perquisites for the purpose of computing disallowanceunder section 40(c) /40A(5) of the Income Tax Act1961?” 2. Whereas the permissibility of the first item of expenditure incurred by the assessee in respect of premium of deferred annuity policy isconcerned the issue is covered by the judgment of this court in thecase of Commissioner of Income Tax vs. Hico Products Pvt. Ltd.[1993] 201 ITR page 567 (Bom.). 3. Whereas the permissibility of the second item of expenditure incurredby the assessee in respect of premium in respect of personalaccident insuranceis concerned the same is also covered by thejudgment of this court in the case of Kores (India) Ltd., vs.Commissioner of Income Tax, reported in 196 ITR 749 (Bom.). 4. Whereas the permissibility of the third item of expenditure incurred by the assessee in respect of premium on medical insuranceisconcerned, we are of the opinion that this item of expenditure shouldreceive the same treatment as that of second item of expenditurereferred to herein above. In other words the premium in respect of 3 P personal accident insuranceand premium of respect of medicalinsurance should get the same treatment. 5. In the above view of the matter, items of expenditure referred toherein above and mentioned in the question referred to as item nosherein above and mentioned in the question referred to as item nos (i), (ii) and (iii) could not have been disallowed. Accordingly theissue with respect to the above three items referred to herein above,is answered in favour of the assessee and against the revenue. issue with respect to the above three items referred to herein above,is answered in favour of the assessee and against the revenue. 6. Whereas the permissibility of the fourth item of expenditure relatingto the reimbursement of medical expenses is concerned; the sameis also covered by the judgment of the Supreme Court in the case ofCommissioner of Income Tax vs. Mafatlal Gangabhai and Co., (P)Ltd., 219 ITR 644 (S.C.)., with the result, reimbursement of medicalexpenses would not be permissible. Thus issue with respect to theexpenditure involved in item no. iv is concerned the same isanswered in favour of the revenue and against the assessee. to the reimbursement of medical expenses is concerned; the sameis also covered by the judgment of the Supreme Court in the case ofCommissioner of Income Tax vs. Mafatlal Gangabhai and Co., (P)Ltd., 219 ITR 644 (S.C.)., with the result, reimbursement of medicalexpenses would not be permissible. Thus issue with respect to theexpenditure involved in item no. iv is concerned the same isanswered in favour of the revenue and against the assessee. 7. This reference is accordingly disposed of with no order as to costs. (V. C. DAGA J. ) (A. S. AGUIAR J.) -x-