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1 - 10 of 13 (0.36 seconds)Commissioner Of Income-Tax vs Britannia Industries Co. Ltd. on 24 November, 1980
The Kerala High Court in CIT v. Malayalam Plantations (India) Ltd., [1990] 186 ITR 322 has discussed the matter in great detail and held that the decision of the Calcutta High Court in Britannia Industries Co. Ltd.'s case [1982] 135 ITR 35, has no application in the matter of interpretation of Section 40A(5) of the Act. We are in complete agreement with the views expressed by the Kerala High Court and the Tribunal has omitted to take note of the provisions of Section 40(c) and Section 40A(5) of the Act.
Commissioner Of Income-Tax vs Malayalam Plantations (India) Ltd. on 13 March, 1996
The Kerala High Court in CIT v. Malayalam Plantations (India) Ltd., [1990] 186 ITR 322 has discussed the matter in great detail and held that the decision of the Calcutta High Court in Britannia Industries Co. Ltd.'s case [1982] 135 ITR 35, has no application in the matter of interpretation of Section 40A(5) of the Act. We are in complete agreement with the views expressed by the Kerala High Court and the Tribunal has omitted to take note of the provisions of Section 40(c) and Section 40A(5) of the Act.
Commissioner Of Income-Tax vs P.R. Ramakrishnan on 14 November, 1979
11. We respectfully dissent from the judgment of the Bombay High Court. We have already noticed the decision of this court in the case of CIT v. P.R. Ramahrishnan, [1980] 124 1TR 545 and the decision of this court in Wheels India Ltd. v. CIT, [1996] 218 ITR 293. In both the cases, this court has taken a view that the valuation of perquisite under Rule 3 has no relevance in determining the ceiling under Section 40(c) or 40A(5) of the Act. Section 40(c) of the Act deals with any expenditure or allowance in respect of any asset of the company used by the director or any person referred to in Section 40(c) either wholly or partly for his-own benefit. It is to be remembered here, that the company is claiming expenditure on the assets of the company used by such persons. If the asset has been used wholly for business purpose, there is no difficulty in concluding that the entire expenditure would be allowed. If it is wholly used for the purpose of the director, there can be no quarrel from the assessee as the entire expenditure claimed would be subject to the ceiling under Section 40(c) of the Act. If the car has been used partly for business purpose of the company and partly for personal purpose of the director, then in such contingency, the ceiling limit cannot be determined on the basis of valuation of perquisite in the hands of the director or employee. Let us visualise a case of a company placing at the disposal of the director a motor car and the company had incurred expenditure such as fuel and also maintenance of the motor car, In such case, when the company claims expenditure incurred as a part of the business expenditure, the amount to be disallowed cannot be based on the valuation of the perquisite in the hands of the director in his assessment. The whole purpose of enacting Section 40(c) of the Act is to curb extravagant expenditure. In the context of Section 40(c) or 40A(5) of the Act, the expenditure that is contemplated is only the actual expenditure and not the notional value of perquisite assessed in the hands of the director or employee. It may be true that a car placed at the disposal of the director was mostly used for the company's purpose and was used for the personal purpose of the directors rarely and even in such case, the actual expenditure incurred by the company will have to be subject to the ceiling
under Section 40(c) of the Act. In considering the deducibility of the expenditure, the section is not concerned with the extent of the use of the asset by the director or employee for his personal use. But, the section focuses its attention on the expenditure claimed by the assessee on its asset used by the director. In other words, the quantum of allowance or disallowance is not related to the extent of user by the director or employee for his personal use, but once the factum of user of the asset of the company by the director or employee for his personal purposes is found, the quantum to be disallowed will be the actual expenditure claimed by the company, provided the conditions stipulated therein are satisfied.
C.W.S. (India) Ltd vs C.I.T on 1 March, 1994
The above view of the Kerala High Court was reiterated by the same court in C.W.S. (India) Ltd. v. CIT, [1992] 198 ITR 660, which also deals with the perquisite value on a car provided by the employer to the employee.
Wheels India Ltd. vs Commissioner Of Income Tax on 9 February, 1995
Learned counsel for the assesses, on the other hand, submitted that the decision of this court in Wheels India Ltd.'s case [1996] 218 ITR 293, is concerned with the expenditure by way of house rent and it has no application for the valuation of perquisite on the car provided by the employer to the director. We are unable to accept the contention of learned counsel for the assessee. There is no material difference between the use of a car and the use of a house, and in the light of the ambit of Sections 40(c) and 40A(5) of the Act, the principle laid down by this court that only the actual expenditure has to be taken will apply in the case of use of the car also.
Commissioner Of Income-Tax vs Electro Steel Castings Ltd. on 12 August, 1991
8. The Orissa High Court in the case of CIT v. Electro Steel Castings Ltd., [1992] 193 ITR 103, has also taken the same view and held that Section 17 in so far as it relates to perquisites which cover perquisites on motor vehicles has no application to Section 40A(5) of the Act and there is no scope to apply Rule 3 in computing the income in respect of the business or profession. Therefore, we are unable to uphold the view of the Appellate Tribunal that the estimated value of perquisite under Rule 3 would represent the expenditure incurred by the company which is disallowable under Section 40A(5) of the Act.
Commissioner Of Income-Tax vs Chemicals And Plastics (I) Ltd. on 14 February, 1989
So also, on the same reasoning, we are unable to agree with the decision of the Punjab and Haryana High Court in CIT v. Nuckem Plastics Ltd., [1989] 179 ITR 196.
Geoffrey Manners & Co. Ltd. vs Commissioner Of Income Tax on 14 December, 1995
. . . The method of valuation of perquisite in respect of motor car set out in the first part of Sub-clause (ii) of Clause (c) of Rule 3 of the Income-tax Rules would be applicable in all cases where it is possible to do so. It is only in cases where determination of the value in the manner laid down in the first part of Clause (c)(ii) is found to be difficult that the valuation should be made on the basis set out in the second part thereof and the table appended thereto."
Commissioner Of Income-Tax vs Rajesh Textile Mills Ltd. on 30 April, 1988
12. We are in respectful agreement with the views expressed by the Gujarat High Court in the above decision. The assessee in the instant case has not furnished the particulars as to the amount of expenditure which would be get covered under the provisions of Section 40(c) or 40A(5) of the Act, and it is impermissible to bring in the provisions of Rule 3 of the Rules to determine the permissible ceiling limit under Section 40(c) or 40A(5) of the Act. Accordingly, we answer the question of law referred to us by holding that the actual expenditure incurred by the company should be taken into account for the purpose of making disallowance under Section 40(c) or 40A(5) of the Act. The Revenue shall be entitled to costs of Rs. 750.