Commissioner of Income Tax vs Jayanthi Films (Madurai) Pvt. Ltd.

Ratnam, J.—In this tax case reference u/s 256(1) of the Income Tax Act, 1961, at the instance of the Revenue, the following question of law

has been referred to this court for its opinion :

Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in deleting the Income Tax Officer''s disallowance of Rs.

40,910 u/s 40(a)(v) of the Income Tax Act, 1961, out of the commission payment of Rs. 13,310 for the assessment year 1971-72 ?

In the course of the proceedings before the Tribunal, the assessee relied upon a decision of the Tribunal in the case of Manjushree Plantation

Ltd., Nilgiris (I. T. A. Nos. 1978 to 1981/MDS/1972-73), dealing with an identical question. That formed the subject-matter of a reference

before this court in the decision in Commissioner of Income Tax, Tamil Nadu-V Vs. Manjushree Plantations Ltd., according to which, in order to

term a payment a ""perquisite"", it had to be a payment other than a cash payment, in pursuance of a contract of service. In this case also, it has been

found that the payments were cash payments and as per the decision referred to earlier, such payments could not constitute ""perquisites"" and the

Tribunal was, therefore, right in holding that the Income Tax Officer was in error in disallowing the sum of Rs. 40,910. We answer the question

referred to us in the affirmative and against the Revenue. No costs.