| Case ID |
042c6b98-e713-4378-b87c-cc811795387f |
| Body |
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| Case Number |
Income-tax Reference No. 51 of 1983 |
| Decision Date |
Jul 08, 1996 |
| Hearing Date |
|
| Decision |
The Supreme Court held that the reimbursement of medical expenses for a director does not qualify as a benefit or amenity under sections 40(c) and 40A(5) of the Income Tax Act, 1961. Therefore, such reimbursement cannot be disallowed as it does not fall under the purview of 'perquisite'. The case revolved around the determination of what constitutes a benefit or amenity when calculating allowable business expenses. The Court emphasized that cash payments made to employees, specifically for medical reimbursements, should not be classified as amenities or benefits, thus ruling in favor of the assessee. |
| Summary |
In the case of Sukhjit Starch and Chemicals Ltd vs. Commissioner of Income Tax, the Punjab and Haryana High Court addressed the treatment of medical reimbursements paid to directors under the Income Tax Act, 1961. The pivotal issue was whether such reimbursements qualify as benefits or amenities, potentially leading to disallowance under sections 40(c) and 40A(5). The Court ruled that these reimbursements do not fall within the definition of 'benefits' or 'amenities', thereby allowing the expenses. This decision is significant for companies in determining the deductibility of similar expenses and clarifies the interpretation of related sections of the Income Tax Act. The case also highlights the importance of understanding the nuances of business expenditure regulations for corporate entities. Keywords like 'Income Tax Act', 'business expenditure', and 'medical reimbursement' are critical for SEO optimization. |
| Court |
Punjab and Haryana High Court
|
| Entities Involved |
SUKHJIT STARCH AND CHEMICALS LTD,
COMMISSIONER OF Income Tax
|
| Judges |
ASHOK BHAN,
N.K. AGGARWAL
|
| Lawyers |
N.K. Sood for the Assessee,
R.P. Sawhney with Sanjay Goyal for the Commissioner
|
| Petitioners |
SUKHJIT STARCH AND CHEMICALS LTD
|
| Respondents |
COMMISSIONER OF Income Tax
|
| Citations |
1998 SLD 174,
1998 PTD 1042,
(1996) 221 ITR 308
|
| Other Citations |
CIT v. Mafatlal Gangabhai Co. (P.) Ltd. (1996) 219 ITR 644 (SC),
CIT v. Indian Engineering and Commercial Corporation (P.) Ltd. (1993) 201 ITR 723 (SC)
|
| Laws Involved |
Income Tax Act, 1961
|
| Sections |
40(c),
40A(5)
|