Ajit Kumar Sengupta, J. - (1.) In this reference under Section 256(1) of the Income-tax Act, 1961, for the assessment year 1965-66, 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 right in holding that the payments made by the assessee to its employees by way of reimbursement of medical bills incurred by the employees did not represent expenditure resulting directly or indirectly in the provision of any benefit or amenity or perquisite to the said employees within the meaning of Section 40(c)(iii) of the Income-tax Act, 1961?"
(2.) This question came up for consideration before this court in CIT v. Kanan Devan Hills Produce Company Ltd. [1979] 119 ITR 431, Indian Leaf Tobacco Development Co. Ltd. v. CIT [1982] 137 ITR 827, CIT v. National and Grindlays Bank Limited [1984] 145 ITR 457. This court held that the cash payment on account of reimbursement of medical expenses of the employees could not be included in the value of the benefit, amenity or perquisite for the purpose of disallowance in excess of the limits laid down in Section 40(c)(iii) or Section 40(a)(v) of the Income-tax Act, 1961.
(3.) We may also note that the Andhra Pradesh High Court in the case of CIT v. Warner Hindustan Ltd. the Madras High Court in the case of CIT v. Manjushree Plantations Ltd. [1980] 125 ITR 150 and the Karnataka High Court in the case of CIT v. Mysore Commercial Union Ltd. [1980] 126 ITR 340 and the Delhi High Court in the case of Instalment Supply P. Ltd. v. CIT [1984] 149 ITR 457, have taken similar views. It may be mentioned that the Andhra Pradesh, Madras and Delhi High Courts have followed the decisions of this court and in particular the decision in the case of Kanan Devan Hills Produce Company Ltd. [1979] 11 ITR 431.;