DARSH KUMAR GOEL, J. - (1.) THE Tribunal Delhi Bench 'C', Delhi, has referred the following substantial questions of law for opinion of this Court, instance of the Revenue : IT Ref. No. 2 of 1984 "(1) Whether on the facts and in the circumstances of the case, the expenditure of Rs. 19,186 incurred on the maintenance of the accommodation provided to Mr. N. Nath, Rs. 24,446 by way of reimbursement of the medical expenses and Rs. 13,560 out of servant's wages constitute 'perquisite' for computation of the disallowance under s. 40A (5) of the IT Act, 1961 ? (2) Whether on the facts and in the circumstances of the case the disallowance on account of perquisite value of car provided by the assessee to the director -employee Mr. N. Nath should be computed in accordance with r. 3 of the IT Rules, 1962 ? (3) Whether on the facts and in the circumstances of the case, the rent of the garage and servant quarters constitute 'perquisite' for the purpose of working out the disallowance under s. 40A(5) of the Act ? (4) Whether on the facts and in the circumstances of the case, the disallowance under r. 6D of the IT Rules should be worked out by making the computation according to the aggregate expenditure incurred by each and every employee during the year and not on the basis of per trip ? (5) Whether on the facts and in the circumstances of the case, the provisions of r. 6D of the IT Rules, 1962 are applicable in respect of the stay of Mr. H. Ingham - IT Ref. No. 3 of 1984 "(1) Whether on the facts and in the circumstances of the case, the amount of Rs. 20,027 and Rs. 3,600 respectively representing proportionate expenses for personal use of car and garage rent should be treated as perquisite for the purpose of working out the disallowance under s. 40A(5) of the IT Act, in the case of Shri K. C. Tapedar, an employee of the company ? (2) Whether on the facts and in the circumstances of the case, the sum of Rs. 9,397 reimbursed to the employee as house rent allowance should be treated as perquisite for the purpose of disallowance under s. 40A(5) of the Act ? (3) Whether on the facts and in the circumstances of the case, the assessee was entitled to the depreciation on the technical know -how capitalized by the assessee company -
(2.) THE assessee is a company incorporated under the Companies Act, 1956. The assessee, inter alia, made following claims during the assessment year in question : (i) Deduction of expenditure incurred on the maintenance of accommodation provided to Shri N. Nath, one of the directors. Medical reimbursement and servants' wages to different employees. (ii) Perquisite value of car provided to Shri N. Nath. (iii) Rent of garage and servant quarter. (iv) Travelling expenditure. (v) Expenditure on stay of Shri H. Ingham. (vi) Expenses on personal use of car and garage rent. (vii) Amounts spent on use of car. The assessee claimed that the entire amount spent on car was for its business and so was the garage rent. (viii) Reimbursement of house rent allowance to the extent of Rs. 9,397. (ix) Depreciation on technical know -how.
(3.) THE AO rejected the claims of the assessee and added back Rs. 19,186 towards maintenance of accommodation provided to Shri N. Nath; Rs. 24,446 towards reimbursement of medical expenses; Rs. 13,560 towards servants' wages, which were held to constitute perquisite for computing disallowance under s. 40A(5) of the Act, perquisite value of car provided to Shri N. Nath was held to be disallowable; rent of garage and servant quarter were held to constitute perquisite for disallowance under s. 40A(5); expenditure incurred on travelling was held to be disallowable under r. 6D by making computation according to aggregate expenditure incurred; r. 6D was held to be applicable in respect of expenditure on stay of Shri H. Ingham; proportionate expenses on personal use of car and garage rent attributable to personal use was directed to be worked out towards disallowance under s. 40A(5); amount reimbursed towards HRA being Rs. 9,397 was treated as perquisite under s. 40A(5) and claim for depreciation on technical know -how capitalized by the assessee was disallowed. The CIT(A) partly allowed the claims of the assessee, which gave rise to ITA No. 928/Del/1983 (1979), at the instance of the Revenue (it is pointed out that 1983 is a mistake in the printed paper book) and ITA No. 944/Del/1979 at the instance of the assessee.;