T.D Sugla, J.:— The two questions raised in this reference are:
“(1) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that reimbursement of medical expenses to directors of Rs. 5,921 was covered by the provisions of section 40(c)(i) of the Income-tax Act, 1961, for the purpose of computing the disallowance under the said section?
(2) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that reimbursement of medical expenses to employees of Rs. 11,028 was to be considered as perquisites for the purpose of computing the disallowance under section 40A(5) of the Income-tax Act, 1961?”
2. Counsel are agreed that the issue involved herein is covered by this court's decision in the case of CIT v. Mercantile Bank Limited, [1988] 169 ITR 44.
3. In view thereof, we answer the questions in the negative and in favour of the assessee. No order as to costs.