Ajit K.Sengupta, J. - (1.) In this reference under Section 256(2) of the Income-tax Act, 1961, for the assessment year 1980-81, the following question of law has been referred to this court : "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the repair expenses incurred by the assessee-company for the portion of the premises occupied by an employee should not be taken into account for the purpose of calculation of disallowance as perquisite under Section 40A(5) of the Income-tax Act, 1961"
(2.) The facts relating to the question are that the assessee did not take into account the perquisite value in respect of the proportionate municipal taxes and repairing charges incurred by the assessee for the portion of the premises occupied by its employee, Shri H.P. Singhee. The Income-tax Officer disallowed Rs. 20,000 under Section 40A(5) being the estimated value of perquisite in respect of proportionate municipal taxes and repairing charges incurred for the portion of the premises occupied by Shri H.P. Singhee. The disallowance was, however, deleted by the Commissioner of Income-tax (Appeals) in appeal.
(3.) Against the aforesaid order of the Commissioner of Income-tax (Appeals), the department appealed to the Tribunal. The Tribunal, following its earlier order for the assessment year 1979-80, confirmed the order of the Commissioner of Income-tax (Appeals) on the point. In the order of the Tribunal for the assessment year 1979-80, it has been stated by the Tribunal that municipal tax was payable in respect of the house owned by the company. Repairs were carried out by the company and it was the duty of the company to maintain the house which was owned by it. On these facts, the finding of the Commissioner of Income-tax (Appeals) on the point was upheld.;