Satish Chandra, C.J.
1. For the assessment year 1968-69, the Tribunal has referred the following question of law for our opinion :
'Whether, on the facts and in the circumstances of the case, the Tribunal erred in law in holding that repairs to the flat occupied by the employees did not provide any benefit or amenity to the employees as contemplated under the provisions of Section 40(c)(iii) ?'
2. The ITO disallowed a sum of Rs. 58,428 on the ground that it represents benefit given to the assessee's (employees) and are expenses which otherwise would have been payable by the employees. The matter ultimately reached the Tribunal. The Tribunal observed that the employees of the assessee-company were occupying the flats which were taken by the assessee-company on lease and the company incurred certain expenditure on the maintenance, repairs, etc., with respect to those flats. The expenditure for repairs to the flats cannot be treated as benefit, amenity or perquisite to the employees. The company will have to undertake the repairs to the flats in the normal course. On this ground it held that the expenditure for repairs cannot be treated as a benefit, amenity or perquisite to the employees within the meaning of Section 40(c)(iii).
3. The finding of the Tribunal that the company will have to undertake repairs of the flats in normal course has not been disputed. It appears that the company had taken on rent (on lease) certain flats which it had let out to its employees. In order to maintain them in good livable condition, the company incurred the expenditure in question for repairs of those flats. There is no evidence that the repairs increased the value of the flats. It is apparent that the company had to maintain the flats in good livable condition and the expenditure for repairs was undertaken to discharge that obligation. In the circumstances, it cannot be said that this expenditure conferred any benefit, amenity or perquisite to the employees within the meaning of Section 40(c)(iii).
4. We, therefore, answer the question referred to us in the negative, in favour of the assessee and against the Department. There will, however, be no order as to costs.
Suhas Chandra Sen, J.
5. I agree.