Judgment

B.P. JEEVAN REDDY, J.-

Civil Appeal Nos. 493-98 of 1984

1. A common question arises in this batch of appeals. It pertains to the interpretation of Section 40(a)(v) as well as Section 40-A(5) of the Income Tax Act. Up to 31-3-1972, Section 40(a)(v) was in force and from 1-4-1972, Section40-A(5) came into force in its place. Both the provisions were substantially similar. Indeed, Section 40(a)(v) was preceded by Section 40(c)(iii) which was, of course, applicable only to companies and not to other assessees.

2. Section 40(c)(iii) introduced by Finance Act, 1973 with effect from 1-4-1963, as substituted by Finance Act, 1964, read as follows:

"40. Amounts not deductible.-Notwithstanding anything to the contrary in Sections 30 to 39, the following amounts shall not be deducted in computing the income chargeable under the head profits and gains of business or profession-

(c) in the case of any company-

(iii) any expenditure incurred after the 29th day of February, 1964, which results directly or indirectly in the provision of any benefit or amenity or perquisite, whether convertible into money or not, to an employee (including any sum paid by the company in respect of any obligation wh