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Judgment
We are concerned with the Assessment Years 1979-80 to 1981-82. The question itself indicates the relevant facts. It reads thus:
Whether on the facts and in the circumstances of the case, the ITAT is correct in law in holding that the premia paid by the assessee on behalf of the employee-director formed part of "salary" and allowable as deduction from computing the assessable income of the company and not "perquisite," disallowable u/s 40A(5) or 40(c) of the LA. Act for the AYs 1979-80, 1980-81 and 1981-82.
The High Court declined to call for a reference of this question, having regard to its earlier judgments.
Our attention is drawn to the provisions of Section 40A(5) and Explanation 2(b) thereto where it is stated that the payment by its assessee of any sum, whether directly or through a fund, other than a recognised provident fund or an approved superannuation fund, to effect an assurance on the life of an employee or to effect a contract for an annuity is a perquisite. We think, in the circumstances, that a question of law does arise which should be considered by the High Court.
Accordingly, the appeals are allowed. The order under appeal is set aside. The question quoted above shall be referred by the Tribunal to the High Court for consideration, after drawing up a statement of case.
No order as to costs.