- (1.) THE Tribunal, Chandigarh Bench, has referred the following questions of law for the opinion of this Court under s. 256(1) 1985, in ITA Nos. 737/Chd/1982, 271/Chd/1983 and 275/Chd/1983 : "1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the medical expenses by way of payment of premium towards group medical insurance scheme and reimbursement of medical expenses, electricity, water and gas charges shall not be treated as perquisite while computing disallowance under s. 40 (c)/40A(5) of the IT Act, 1961 ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the provisions of cl. (c) of sub -s. (5) of s. 40A shall not apply for restricting the allowance in respect of salary and perquisite paid by the assessee to its employees ? 3. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the roads constructed within the factory premises constituted plant and qualified for the grant of investment allowance under s. 32A of the IT Act, 1961 - "1. Whether the Tribunal has been right in law in holding that the assessee was not entitled to deduction of surtax payable by it in pursuance of the Companies (Profits) Surtax Act, 1964, in arriving at the taxable income ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the no weighted deduction under s. 35B is available in respect of freight expenses of Rs. 5,25,548, octroi duty of Rs. 2,972, bank charges of Rs. 427, trunk call charges of Rs. 3,439 and insurance charges Rs. 53,161 - "1. Whether, the Tribunal has been right in law in holding that the assessee was not entitled to deduction of surtax payable by it in pursuance of the Companies (Profits) Surtax Act, 1964, in arriving at the taxable income - 2. The assessee claimed deduction in respect of medical expenses by way of payment of premium towards group medical insurance scheme and reimbursement of medical expenses, electricity, water and gas charges. The claim was disallowed by the AO by treating the same as perquisite under s. 40(c)/40A(5) of the Act. The CIT(A) allowed the claim of the assessee which was affirmed by the Tribunal. The assessee also made a claim under s. 32A in respect of the amount spent for construction of roads within the factory premises by claiming the said expenditure the part of investment on plant for the purpose of investment allowance under s. 32A of the Act, which claim was disallowed by the AO but was allowed by the CIT(A) and affirmed by the Tribunal.
(2.) RE : Q. No. (1) (by the Revenue)
(3.) LEARNED counsel for the assessee relies on the judgment of the Hon'ble Supreme Court in CIT vs. Mafatlal Gangabhai & Co. (P) LTD. (1996) 132 CTR (SC) 248 : (1996) 219 ITR 644 (SC) : (1996) 7 SCC 569 : AIR 1996 SC 3003, particularly in paras 12 to 14 (of the SCC), holding that cash payments made to the assessee were not covered by the expression "expenditure" under s. 40A(5) or under s. 40(c) of the Act. Following the above judgment, this Court in HMM Ltd. vs. CIT (2002) 172 CTR (P&H) 538 : (2001) 252 ITR 842 (P&H), in the case of the assessee for the asst. yr. 1977 -78, decided an identical question against the Revenue and in favour of the assessee.;