This Special Bench was constituted to consider question whether provisions of section 40A (8) of Income-tax Act, 1961 ('the Act') are applicable to assessment year 1976-77, irrespective of previous year followed by assessee. Bombay Bench had expressed opinion that it would, while Madras Bench and had held that section 40A (8) would apply only to expenditure on interest incurred after 1-4-1976. 2. assessee-company manufactures pharmaceuticals, drugs and milk products. Its accounting year ended on 30-6-1975 which is relevant for assessment year 1976-77 (year under consideration). ITO had disallowed under section 40A (8) Rs. 3,11,040. only discussion in assessment order as per paragraph 10 is that (assessee) has correctly shown disallowance at rate of 15 per cent of Rs. 20,73,598 (out of interest paid) amounting to Rs. 3,22,040. Before Commissioner (Appeals), assessee raised additional ground challenging disallowance under section 40A (8) on ground that section 40A (8) , having been introduced with effect from 1-4-1976, would, therefore, be applicable to expenditure incurred on payment of interest on deposits from that date and not to interest paid prior to that date and as assessee's previous year relating to assessment year 1976-77 ended on 30- 6-1975, provisions of section 40A (8) were inapplicable to this year. assessee relied on Tribunal Madras Bench 'D' decision in A. P. P. Ltd. [IT Appeal No. 952 (Mad.) of 1980] for assessment year 1976-77. Commissioner (Appeals), without discussion matter, rejected assessee's contention and confirmed ITO's order. 3. At hearing before us, learned counsel for assessee again relied on he aforesaid decision of Tribunal Madras Bench 'D' and emphasized that provisions of section 40A (8) operate only in respect of expenditure on interest incurred after 1-4-1976. In Madras High Court case, accounting year ended on 30-4-1975, while in case before us accounting year ended on 30-6-1975. It was thus urged that Madras High Court decision squarely applied in assessee's case. 4. learned departmental representative urge that section 40A (8) had been introduced by Finance Bill, 1975 with effect from 1-4-1976-[1975] 98 ITR (St.) 129. He also referred to memorandum explaining provisions of Finance Bill, 1975 at [1975] 98 ITR (St.) 184 (paragraphs 9-11) where it was indicated that 'the proposed amendment will take effect from 1st April, 1976, and will accordingly apply in relation to assessment year 1976-77, and subsequent years'. Similar were observations under 'Notes on clauses' in [1975] 98 ITR (St.) 168. It was emphasized by departmental representative that there was nothing in aforesaid amendment or Notes on clauses or in memorandum to suggest that previous year had any relevance and that it was clear that disallowance of 15 per cent of interest was to be made out of expenditure on interest incurred in assessment year 1976-77 irrespective of different previous years followed by diverse assessee. It was further urged that it was elementary principle of income-tax law that law to be applied is that in force in assessment year and it is immaterial what previous year assessee follows. It was urged that any amendment which is in force at beginning of relevant assessment year must govern case after income under assessment is earned. It was also urged that Legislature had given one year's advance notice of applicability of new provision [section 40A (8)]. 5. revenue's case is supported by good authority. Kanga & Palkhivala in Law & Practice of Income-tax, Seventh edn., Vol. 1 at p. 83 under head 'Law to be applied is that in force in assessment year' observed: "Though subject of charge is income of previous year, law to be applied is that in force in assessment year, unless otherwise stated or implied." These observations are based on CIT v. Isthmian Steamship Lines [1951] 20 ITR 572, 577 (SC) and M. K. R. Deivanayagam Pillai v. Second Addl. ITO [1959] 35 ITR 549, 551 (Mad.). learned commentators further observed: "Any amendment which is in force at beginning of relevant assessment year must govern case though amendment is made after income under assessments is earned. In other words, Income-tax Act as it stands amended on 1st April of financial year must apply to assessment for that year." These observations are again based on number of decisions given in footnotes 12-13 on same page. We will refer to these decisions later. 6. Similar are observations by Sampat Iyengar in Law of Income-tax, Seventh edn., Vol. 1 at pages 450-451 under head "14. Levy of change according to provisions of Income-tax Act as they stand on first day of April each year." learned commentator, relying on Isthmian Steamship Line's case (supra) observed that Supreme Court pointed out that "It is cardinal principal of tax law that law to be applied is that in force in assessment year unless otherwise provided expressly or by necessary implication. But, it has been held, subject of charge is not income of year of assessment, but income of previous year. As Finance Acts come into force on first day of April each year, therefore, laws to apply is law in force at commencement of year of assessment, i.e., first day of April each year." commentator relied on Maharahjah of Pithapuram v. CIT [1945] 13 ITR 221 (PC) as also on M. K. R. Deivanayagam Pillai's case (supra). commentator further observed in same para: "Thus, as charge on income of previous year, substantive law of that year must be applied." commentator relied on CIT v. Madhusudan Agarwalla [1978] 111 ITR 525 (Cal.). commentator further observed that "applying above rule, Supreme Court in CIT v. Scindia Steam Navigation Co. Ltd. [1961] 42 ITR 589 declined to allow retrospective operation to be given to fourth proviso section 10(2) (vii) inserted by Income-tax (Amendment) Act, 1946 which had been brought into forced on 5-5-1946. 7. Similar are observations of Chaturvedi and Pithisaria in Income-tax Law, Third edn., Vol. 1 at p. 193 under head 'Law applicable to income-tax assessments'. These commentators have also relied on number of decisions. 8. Supreme Court in Isthmian Steamship Lines' case (supra) at p. 577 clearly observed: "The first question to be answered is whether these dated [1-4- 1940 when amendment to section 10(2) (vii) of Indian Income-tax Act, 1922 took effect and 1-4-1939 mentioned in amended proviso] are to apply to accounting year or year of assessment. They must be held to assessment year, because in income-tax matter, law to be applied is law in force in assessment year unless so otherwise stated or implied." 9. Earlier, Privy Council in Maharajah of Pithapuram's case (Supra) observed that under express terms of section 3 of Indian Income-tax Act, 1922 ('the 1922 Act') subject of charge is not income of year of assessment but income of previous year. In that case, section 16(1) (c) of 1922 Act, which was amended by Income-tax (Amendment) Act, 1939, w s held to apply to assessment year 1939-40 although subject of charge was income of accounting year 1938-39. Section 16(1) (c) applied t o revocable transfers of assets-whether they were effect before or after commencement of Income-tax (Amendment) Act. assessee by certain deeds of trust and settlement dated 5-4-1933 had settled properties on his daughters with provision reserving to himself powers to revoke settlements and question was whether for assessment year 1939-40, income of accounting year 1938-39 derived from such assets was assessable under section 16(1) (c) and assessee urged that only transfers effected after 1-4- 1939 were hit by section 16(1) (c) but Privy Council repelled that contention and held that law as amended would apply to assessee. 10. To same effect is decision of Chief Court of Sind in CIT v. Sind Hindu Provident Funds Society (1940) 8 ITR 467 where it was held that law and statutory rules applicable for determining assessment are law and statutory rules in force year of assessment and not those which were in force during (accounting) year income of which is sought to be assessed. Thus, for assessment year 1936-37, Government notifications of 2-11- 1935 and 4-4-1936, limiting exemption of interest on securities purchased through post offices was applicable though income assessable was for accounting year ending 31-3-1936. 11. In Rai Bahadur H. P. Banerjee v. CIT [1941] 9 ITR 137 (Pat.), question was whether provisions of section 16(3) (a) (iii) inserted by section 2 of Income-tax (Amendment) Act, 1937 applied to assessment year 1937-38 in respect of income from assets transferred by husband to his wife otherwise than for adequate consideration before 1-4-1937 and it was held that said provision applied to transfers made before 1-4-1937. Court, thus, repelled contention that amending section would not apply to transactions entered into before amendment. 12. There is thus catena of decisions laying down, what has by now become well established rule of interpretation, that any amendment which is in force at beginning of relevant assessment year must govern case though amendment is made after income under assessment is earned in accounting year which has since closed. Calcutta High Court in Madhusudan Agarwalla's case (supra) followed earlier decisions mentioned above and reaffirmed said principle of construction of statutes. Similar view had been taken by Gujarat High Court in Maneklal Vallabhdas Parikh & Sons v. CIT [1969] 72 ITR 637. 13. Madras High Court in M. K. R. Deivanayagam Pillai's case (supra) while dealing with double taxation relief under India & Burmah Income-tax Relief Order, 1936, held that law to apply to claim of assessee in this case was law as it stood in year of assessment, namely, 1947-48. It was observed that only where there was change in laws even within course of assessment year, it was law in force at commencement of assessment year that should apply in absence of any statutory provision to contrary. 14. Delhi High Court in R. Dalmia v. CIT [1972] 84 ITR 661 observed that it was well recognized that specific dates in 1961 Act and Finance Act, 1955, had reference to assessment years and had nothing to do with accounting years of assessee which might differ from persons to person. Thus, amendment contained in Finance Act was held applicable to assessment year 1955-56. 15. Madras High Court in CIT v. Best & Co. (P.) Ltd. [1979] 119 ITR 830 observed at p. 834 that it was well settled proposition in income tax law that in income-tax matters, law to be applied is law in force in assessment year unless otherwise stated or implied. Madras High Court followed Supreme Court decision in Isthmian Steamship Lines' case (supra). 16. Supreme Court in Reliance Jute & Industries Ltd. v. CIT [1979] 120 ITR 921 reiterated that it was cardinal principle of tax law that law to be applied is that in force in assessment year unless otherwise provide expressly or by necessary implication. They followed their decisions in Isthmian Steamship Lines' case (supra) and Karimtharuvi Tea Estate Ltd. v. State of Kerala [1966] 60 ITR 262 (SC). 17. Supreme Court in Union of India v. Madan Gopal Kabra [1954] 25 ITR 58 was considering applicability of Finance Act, 1950 to 'United States of Rajasthan' for assessment year 1950-51 and they observed that income for assessment year 1950-51 became assessable to Indian income-tax in respect of previous year 1949-50. They rejected contention that as Constitution of India had come into force only on 26-1-1950, income of previous year before 26-1-1950 was not taxable to Indian Income- tax. At page 70, they observed that "The case is thus one where statute purports to operate only prospectively, but such operation has, under scheme of Indian Income-tax law, taken into account income earned before statute came into force. Such enactment cannot, strictly speaking, be said to be retroactive legislation, though its operation may affect acts done in past." 18. Supreme Court in Karimtharuvi Tea Estate Ltd.'s case (supra) observed: "It is well settled that Income-tax Act as it stands amended on first day of April of any financial year must apply to assessment of that year." However, dealing with amendment coming into force after 1st April, they observed "Any amendments in Act which comes into force after first day of April of financial year, would not apply to assessment for that year, even if assessment is actually made after amendments come into force." Supreme Court explained that its earlier decision in Isthmian Steamship Lines' case (supra) had laid down that amended Act as on 1st April applied to assessment year and accounting year had no relevance, and that though subject of charge was income of previous year, law to be applied was that in force in assessment year. 19. Punjab & Haryana High Court in L. Rajeshwar Pershad v. CIT [1986] 52 CTR (Punj & Har.) 305 were dealing with assessability it to capital gains of sale of ornaments in financial year 1972-73 in view of amendment of section 2(14) (ii) of Act made effective from 1-4-1973 by including jewellery in definition of 'capital assets'. Question before Court was whether said amendment governed assessment year 1973-74. following Karimtharuvi Tea Estate Ltd's case (supra) High Court held that sale of jewellery in financial year 1972-73 was assessable in assessment year 1973-74. High Court thus rejected assessee's contention that as sale of jewellery was made before amendment, amendment did not apply to his case. 20. In J. K. K. Angappan & Bros. v. CIT [1973] 91 ITR 513 (Mad.), while dealing with voluntary disclosure under Finance (No. 2) Act, 1967, Madras High Court observed that it was well settled rule of interpretation that in construing scope of legal fiction it would be proper and even necessary to assume all those facts on which alone fiction can operate and construction which defeats very object sought to be achieved by Legislature must, if possible, be avoided. 21. Applying aforesaid ratio to facts of case before us, Legislature having declared that section 40A (8) would operate from assessment year 1976-77, it has to be assumed as necessary corollary that said section would operate for previous year relevant for assessment year 1976-77 and to hold that said section would operate only in respect of expenditure incurred on or after 1-4-1976, as contended by assessee, would nullify Legislature's intention to apply said section with effect from assessment year 1976-77. We may observe that arguments advanced regarding interpretation of section 64 of Act, similar to those urged before us by assessee company, that taxing provisions would apply only prospectively and would not affect transactions already completed, were rejected in number o f decisions where it was held that section 64(1) concerns income from transferred assets and not date of transfer and if income form transferred assets (to wife or minor child without adequate consideration) arose in accounting year relevant to assessment year, income was assessable. number of cases are enumerated at page 1835 of Chaturvedi and Pithisaria's Income-tax, Third edn., Vol. 2. Similar are observations at p. 2379 of Sampath Iyengar's Law of Income-tax Seventh edn., Vol. 3. 22. In this context, we have to refer to CIT v. Bombay Photo Stores (P.) Ltd. [1970] 76 ITR 84 (Cal.) on which assessee has relied in support of his proposition that only law in force in accounting year should be applied. In case, company's accounting year had ended on 30-6-1959 and it had declared dividend in March 1960 when statutory percentages of total income under section 23A of 1922 Act for declaration of dividend (within 12 months of close of previous year) were 45 per cent in case of manufacturing, processing, etc., and 60 per cent in case of trading. However, by section 11 of Finance Act, 1959, said statutory percentages were amended to 50 per cent and 65 per cent respectively, with effect from 1-4-1960. 23. controversy was whether revised percentages would apply in assessee's case in respect of assessment year 1960-61 for which ITO had made assessment on 17-3-1961. Calcutta High Court held that as divided was to be declared within 12 months following expiry of previous year, statutory percentages operative in previous year only have to be considered and not revised percentages. Court came to this conclusion on analyzing language of section 23A as well as amendment introduced by Finance Act, 1959 which, according to High Court, intended revised percentages to be applicable only prospectively from 1-4- 1960. Court further observed that tax cannot be levied by implication. Court, therefore, was of opinion that revised percentages would not be applicable and only percentages operative in previous year would be operative in that case. 24. Thus, said case was decided on language of section 23A of 1922 Act and of Finance Act, 1959 and does not lay down any general proposition regarding applicability of law as on 1st April to assessment year (irrespective of previous year followed by assessee). 25. In CIT v. Sundaram Industries (P.) Ltd. [1969] 71 ITR 380 (Mad.) it was held amended section 23A which had become applicable from 1-4-1954 would apply in assessee's case whose accounting year ended on 31-5-1954 (relevant for assessment year 1955-56). Thus, Madras High Court's view is different than that of Calcutta High Court. 26. scheme of levy of additional income-tax on undistributed profits of private limited companies under section 104 of 1961 Act (and section 23A of 1922 Act) is entirely different from levy of income-tax on income or allowance of expenditure. Under aforesaid provisions, private company must distribute out of its total income statutory percentages as dividend within 12 months of expiry of its previous year, otherwise, it will have to pay additional income-tax. Thus, law applicable would be as obtaining immediately on close of previous year. proposition regarding applicability of income-tax laws as on 1st April being applicable in assessment year would, therefore, not be applicable while considering special provision of levy of income-tax on undistributed income. That is why case law relevant to controversy before us, namely, of law existing on 1st April being applicable to assessment year was neither cited nor considered by Calcutta High Court in Bombay Photo Stores (P.) Ltd.'s case (supra). We may point out that assessee had to take positive action of declaring dividend with time framework, i.e., immediately after close of accounting year in any case before expiry of 12 months thereafter so as to avoid levy of additional income-tax. If assessee did not declare dividend of statutory percentages of total income, then additional income-tax was to be levied by ITO. However, in case before us, no positive action on part of assessee is contemplated and only at time of computation of total income, ITO has to disallow part of certain expenditure (on payment of interest) in light of law obtaining as on 1st April of assessment year in question. 27. Let us now analyse assessee's arguments based on A. P. P. Ltd.'s case (supra). first argument is that though there is nothing in section 40A (8) to say that amount disallowed under that section shall be deemed to be income of assessee but said section by implication treated disallowed expenditure on interest as part of income. Thus, there was implied deeming of disallowed interest as income and implied deeming of income did not have any retrospective effect as Legislature's usual practice was of giving assesse chance to arrange its affairs. It was admitted that section 40A (8) was introduced by Finance Act, 1975 with effect from assessment year 1976- 77, thus, giving one year's advance notice, still it was claimed that sufficient notice was not giving to assessees to arrange their affairs. Though revenue contended that Legislature was competent even to retrospectively amend law and, thus, assess income with had already accrued in earlier years, assessee urged that for retrospective legislation, there must be specific intention expressed by Legislature and that in present case, there was no express declaration of such intention by Legislature. It was urged that holding that section 40A (8) operated from assessment year 1976- 77, irrespective of previous year, would lead to absurd and anomalous results and applying modern 'purposive approach' by considering policy behind enactment of curbing credits by non-banking concerns, curb could only be on taking fresh interest-bearing deposits after 1-4-1976. 28. We have given very careful and anxious consideration to this matter and we find ourselves unable to accept assessee's contentions. There is no warrant for equating disallowed expenditure on interest with deemed income. Income and expenditure are two different and diametrically opposite concepts. Income is what comes in, while expenditure is what goes out. Thus, to treat income as interchangeable with expenditure would be confusing issue. We, therefore, cannot accept proposition that disallowed expenditure becomes deemed income. 29. Regarding given assessee chance to arranges its affairs, we are unable to find any such rule of construction f statutes. When Parliament has full and plenary powers even to make laws retrospective in operation, we do not see anything wrong with Legislature introducing section 40A (8) by Finance Act, 1975 and making it effective only one year later, i.e., from 1-4-1976 which would thus be operative in assessment year 1976-77. Privy Council in Maharajah of Pithapuram's (supra) at p. 223 observed "under express terms of section 3 of Indian Income-tax Act, 1922, subject of charge is not income of year of assessment, but income of previous year. This is in direct contrast with English Income-tax Acts, under which subject of assessment is income of year of assessment, though amount is measured by yardstick based on previous years." Similarly, Delhi High Court in R. Dalmia's case (supra) at p. 665 observed: "It was contended by learned counsel for assessee that section 2(6C) (iii) came contended by learned counsel for assessee that section 2(6C) (iii) came into force on April 1, 1955, while previous year relevant to assessment year in question was from October 1, 1953 to September 30, 1954. Section 2(6C) (iii), therefore, did not apply to case. contention is not well founded ... Further, it is well recognized that specific dates which are mentioned in Income-tax Act have reference to assessment years and have nothing to do with accounting years of assessee which may differ from person to person. amendment continue in Finance Act, 1955, in respect of section 2(6C) (iii) was thus applicable to assessment year 1955-56 and was rightly invoked by Income-tax Officer." 30. We are unable to accept Shri Dastur's contention that there was any ambiguity regarding applicability of provisions of section 40A (8) or that applicability of said provisions to assessment year 1976-77 would lead to manifestly absurd and anomalous results. When intention of Legislature is clear and unequivocal, there is no room for trying to go behind clear language of section. 31. Maxwell on Interpretation of Statutes, Twelfth edn. observes at p. 28 under Chapter 2 while discussing general principles of interpretation that primary rule is of literal construction. rule of construction is 'to intend Legislature to have meant what they have actually expressed.' "Where language is plain and admits of but one meaning, task of interpretation can hardly be said to arise." 32. Odgers' Construction of Deeds and Statutes, Fifth end. at p. 260 under head '8. Statute, if clear, must be enforced' observes "if language of statute is clear, it must be enforced though result may seem harsh of unfair and inconvenient". Reliance is placed on Re. Robb's Contract [1941] Ch. 463 at p. 478 per Lord Greene M. R. 33. Craies on Statute Law, Seventh end. at p. 64 under Chapter 'Construction where meaning is plain' under heading 'Meaning and legal e f f e c t distinguished' observes: "There is no place for interpretation or construction except where words of statute admit of two meanings." As Scot L. J. said: "Where words of Act of Parliament are clear, there is no room for applying any of principles of interpretation which are merely presumptions in cases of ambiguity in statute." Under heading 'Construction according to intention' (on same page) author observed: "The cardinal rule for construction of Acts of Parliament is that they should be construed according to intention expressed in Acts themselves. If words of statute are themselves precise and unambiguous, then no more can be necessary than to expound those words in their ordinary and natural sense. words themselves alone do in such case best declare intention of law-giver." It was further observed (on p. 65) that primary rule is literal rule and that intention of Legislature is not be speculated on. 34. Bindra on Interpretation of Statutes, Fifth edn. at pages 552-553 under heading 'Rule to determine tax liability' noted that Lord Cairns observed in Partington v. Attorney General [1869] LR 4 HL 100: As I understand principle of all fiscal legislation, it is this: if person sought to be taxed comes within letter of law, he must be taxed, however, great hardship may be appear to judicial mind to be." Similarly, Collins M. R. in Attorney General v. Earl of Selborne said: "Therefore, Crown fails if case is not brought within words of statute, interpreted according to their natural meaning." At p. 554 under head 'Literal construction of words used', author observed: "It is no doubt true that in construing fiscal statuses and in determining liability of subject to tax, one must have regard to strict letter of law and not merely to spirit of statute or substance of law. If revenue satisfies court that case falls strictly within provisions of law, subject can be taxed." At p. 559, under head 'Considerations of reason and justice not material', it was noted that in Morley v. Hall, Tounten, J. observed with reference to stamp law that it "imports nothing of reason and justice but depends entirely upon language of Legislature". author further observed on basis of A. S. Krishna & Co. v. State of Andhra AIR 1957 AP 706, 710. "In case of taxing statute, court should be guided by general scope of enactment and express provisions of statute and not by considerations which might weigh in case arising under statute of frauds or similar statutes". At p. 560, author noted that in case of fiscal enactment, one has to look at what is clearly said. There is no room for any 'intendment'. No argument based on hardship or inconvenience can be entertained. Rule of strict construction does not mean that language of provisions should be tortured into meaning something artificial, if its natural meaning is not impugnant to reason. Thus, rules of interpretation of statutes are quite emphatic that where language of statute is clear, effect should be given to it, however, hard case of taxpayer may appear to be. 35. Applying said rule to case before us, we do not see how provision for disallowance of interest under section 40A (8) is not applicable to assessment year 1976-77. We are, therefore, unable to accept Shri Dastur's argument that literal construction of section 40A (8) would lead to absurd and anomalous results. Shri Dastur has not spelt out what absurd or anomalous results he visualised and we are unable to see any such results. According to us, provisions of section 40A (8) do not lead to any absurd or anomalous results and intention of Legislature is quite clear that said provisions are to apply in assessment year 1976-77 and, therefore, said provisions would apply, irrespective of facts as to which previous year particular assessee follows and so long as previous year followed by assessee would be relevant for assessment year 1976-77, provisions of section 40A (8) would apply to that particular assessee. we have already noted that Legislature had given assesses one year's notice by introducing said provision in Finance Act, 1975 though it was applicable for assessment year 1976-77. Therefore, submission of Shri Dastur that assessee should be given adequate notice to arrange his affairs, though legally not correct, is still factually invalid because Parliament did give one year's advance notice to assessee to arrange their affairs. Parliament has plenary powers to legislate prospectively as well as retrospectively and there is no limitation on Parliament's power to direct from which date particular fiscal provision would operate. It is true that in some cases Parliament does specify date from which date said provision is to come into force. For example, under section 40A (3) in respect of disallowance of payment of Rs. 2,500 or more not paid by crossed cheque, Parliament did specify that payments made after 31-3-1969 would be hit by said provision. However, Parliament has also specified in respect of number of other fiscal provisions, particularly annual amendments to 1961 Act brought through Finance Acts that certain provisions would be applicable with effect from specified assessment years. This is well recognised and much used method of amendment of Act. We cannot arrogate to ourselves power to sit in judgment over wisdom of introducing particular fiscal provision with effect from particular assessment year and we have to give effect to clear legislative intention as expressed by Parliament through amendment to Act. It is not for us to twist fiscal provision on ground that literal construction of fiscal provision would result in hardship or that particular assessee did not get sufficient advance notice to arrange his affairs in light of amendment. Nor can we import 'purposive approach' to hold that though section 40A (8) was clearly directed to be operative with effect from 1-4-1976 for assessment year 1976-77, yet, according to us, it would apply only to expenditure on interest incurred after 1-4- 1976. For foregoing reasons, we are, therefore, unable to accept assessee's contentions based on view taken by Madras Bench. 36. In result, we uphold Commissioner (Appeals)'s order that section 40A (8) was applicable in assessment year 1976-77 and, therefore, disallowance made by ITO stands upheld. 37. We now deal with other grounds raised in this appeal. 38. Ground Nos. 2-3 are regarding assessability of reimbursement of medical expenses and applicability of sections 40A (5) /40(c) of Act. ITO in paragraph 3 of assessment order observed as under: "3. Disallowance under section 40A (5) and under section 40(c). -Assessee has worked out this disallowance at Rs. 2,60,659 without taking into account reimbursement of medical expenses. same has been considered as perquisites while arriving at above disallowance. correct disallowance works out to Rs. 2,84,151." Commissioner (Appeals) in paragraph 7 noted assessee's grievance against ITO's treating reimbursement of medical expenses as perquisite. He upheld ITO's action in applying section 40A (5) which finding, according to us, was unnecessary as there was no controversy regarding disallowance of expenses of Rs. 2,60,659 and only controversy before Commissioner (Appeals) was regarding treatment of reimbursement of medical expenses as perquisite by ITO. Hence, ground No. 2 raising point whether section 40A (5) or section 40(c) applied to director employees being academic is rejected. Salaries of all directors were above Rs. 72,000 and, therefore, it is immaterial whether section 40(c) or proviso to section 40A (5) applies in case of director employees. 39. Commissioner (Appeals) further held that cash reimbursement of expenses constituted distinct addition to salary of director employees. He thus varied ITO's findings because ITO had treated reimbursement of medical expenses as perquisite. assessee-company as per Annexure XIII (paper book, page 31) had worked out disallowance under section 40A (5) in respect of other employees at Rs. 32,235 and total disallowance at Rs. 2,60,659 and had given note that medical expenses reimbursed to employees and directors had not been considered as perquisite while computing aforesaid disallowance. company furnished details of medical expenses (PB 32) of directors at Rs. 13,608 and all other employees at Rs. 10,233 totalling Rs. 23,841 and it is this amount which ITO added as 'disallowance under section 40A (5) and 40(c) '. 40 . Thus, controversy before us is whether Commissioner (Appeals) was right in treating reimbursement of medical expenses as part of salary. 41. We may straightaway note that matter is covered squarely by decision of Bombay Special Bench in Blackie & Sons (India) Ltd. v. ITO [1983] 3 SOT 72, where in paragraph 19 Bench noted that Explanation 2 to section 40A (5) defined not only 'perquisite' but also defined 'salary' by stating that 'salary' has meaning assigned to it in section 17(1) , read with section 17(3) , of act subject to certain modifications, namely, that perquisite was omitted from section 17(1) (iv). Bench noted that 'profits in lieu of or in addition to salary or wages' was not omitted from same clause and that section 17(3) (ii) defining 'profits in lieu of salary' included 'any payment ... received by assessee from employer'. 42. Special Bench observed that "the words 'any payment' again is wide enough to cover every payment made by employer to employee irrespective of context in which or purpose for which payment is made ... In other words, it would also include payment made by employer to employee which is in nature of payment made for reimbursement of expenses." (p. 77) 43. Bench then arrived at conclusion that 'salary as defined in Explanation 2 includes every cash payment due to or received by employee'. Bench was considering reimbursement by employer to employee medical expenses and lunch expense (paragraph 8). 44. At hearing before us, learned counsel for assessee urged for reconsideration of aforesaid Special Bench decision. He relied on Tribunal Bench 'A's order in assessee's case for assessment year 1977- 7 8 where Bench had held in paragraphs 10 and 10(a) that cash reimbursement made by assessee-company to its employees was not hit by section 40A (5) in case of employees and by section 40(c) in case of directors and employee-directors. Bench in paragraph 8 noted assessee's contention that medical reimbursement was perquisite but in view of expression 'whether convertible into money or not' qualifying perquisite in section 40A (5) (a) (ii), cash payment could not be covered by said sub- clause. Support was taken from CIT v. Indokem (P.) Ltd. [1981] 132 ITR 125 (Bom.) where, following CIT v. Kanan Devan Hills Produce Co. Ltd. [1979] 119 ITR 431 (Cal.) and CIT v. Manjushree Plantations Ltd. [1980] 125 ITR 150 (Mad.), Bombay High Court held that amount paid by way of bonus and commission in cash by assessee-company to employees was not perquisite within meaning of section 40(c) (ii) in view of said term 'whether convertible into money or not' used in said section (which was operative in assessment year 1964-65). Bench accepting this contention held that medical reimbursement paid in cash was not perquisite, as section 40A (5) (a) (ii) contemplated disallowance of payment in kind only by employer to employee. Bench noted that similar view had been taken in CIT v. Tecalemit (Hind) Ltd. [1982] 137 ITR 285 (Cal.) which had followed its earlier decision in Kanan Devan Hills Produce Co. Ltd.'s case (supra) while interpreting provisions of section 40(c) (ii) in respect of motor car allowance paid in cash to employees. 45. For holding further that reimbursement of medical expenses was not even part of salary, said Bench 'A' relied on Tribunal, Hyderabad Bench's decision in IT appeal nos. 676-679 (Hyd.) of 1980 dated 30-3-1981 (PB 33-34). 46. We have persued said decision of Hyderabad Bench where for holding that cash allowance are not perquisites, reliance was placed on Manjushree Plantations Ltd.'s case (supra) and CIT v. Mysore Commercial Union Ltd. [1980] 125 ITR 341 (Kar.). However, Hyderabad Bench further observed that medical reimbursement was not 'remuneration' within meaning of section 40(c) nor was 'benefit or amenity'. Bench for taking this view relied on some earlier decision which has not been made available to us. Thus Hyderabad Bench's decision is no authority for holding that cash reimbursements by employer to employee are not part of salary. We have already noted above detailed discussion by Special Bench in Blackie & Sons (India) Ltd.'s case (supra) for holding cash payments by employer to employee are covered by salary. 47. learned counsel for assessee next urged that expression 'whether convertible into money or not' occurring in section 40A (5) (a) (ii) qualifying 'perquisite' excludes cash payment as was held in Indokem (P.) Ltd.'s case (supra). It is next urged that definition of 'perquisite' in Explanation 2(b) to said section is exhaustive and that clauses (i) to (v) thereof do not contemplate cash payment. 48. Accepting above argument of assessee should imply that cash payments being not covered by definition of 'perquisite' under Explanation 2(b), should be fall under Explanation 2(a) in view of inclusive definition of 'salary' as per section 17(1) which has been adopted by Explanation 2(a) but learned counsel for assessee even disputes this proposition on ground that ordinary meaning and connotation of 'perquisite' should not be ignored, and while ordinary meaning of 'salary' does not include reimbursement of expenses, ordinary meaning of 'perquisite' would take in reimbursement of expenses. For proposition, he refers to discussion under head 'Perquisite' in Kanga & Palkhivala's Law and Practice of Income-tax, Seventh edn. under section 17 which reads as follows: "'Perquisite'-'Perquisite' is defined in Oxford English Dictionary as 'any causal employment, fee, or profit, attached to office or position in addition to salary or wages'. 'Perquisite' denotes personal advantage; it is something that benefits man by going 'into his own pocket': it does not cover mere reimbursement (be it by way of allowance) of travelling or other expenditure incidental to employment. Thus, transport facilities made available to employee for going from home to office and back, should not be regarded as perquisite". (p. 311) 49. assessee relied on CGT v. N. S. Getti Chettiar [1971] 82 ITR 599 where Supreme Court approved following observations of Craies on Statute Law, Sixth edn. at p. 213: "... interpretation clause which extends meaning of word does not take away its ordinary meaning. interpretation clause is not meant to prevent word receiving its ordinary, popular and natural sense whenever that would be properly applicable, but to enable word as used in Act, when there is nothing in context or subject-matter to contrary, to be applied to some things to which it would not ordinarily be applicable." (p. 605) Reliance was also placed on CGT v. Dr. R. B. Kamdin [1974] 95 ITR 476 at p. 481 where Bombay High Court extracted observations of Supreme Court in Barsi Light Railways Co. Ltd. v. Joglekar AIR 1957 SC 121 to effect that there must be compelling words in statute to show meaning different from or in excess of ordinary meaning was intended and where within framework of ordinary acceptation of word, every single requirement of definition clause was fulfilled, it would be wrong to take definition as destroying 'essential meaning' of that word. 50. revenue's contention was that purpose of introduction of section 40A (5) was given in Finance Minister's Budged Speech for 1971-72 in [1971] 80 ITR (St.) 96 which reads: "I am firmly of view that fiscal instrument must be deployed to discourage payment of high salaries and remunerations which go ill with norms of egalitarian society. I accordingly proposes to impose ceiling on remuneration of company employees which would be deductible in computation of taxable profits. ceiling is being set at Rs. 5,000 per month. Together with existing ceiling of Rs. 1,000 per month in case of perquisites, for purposes of taxation, will be at Rs. 6,000 per month ..." It was, therefore, urged for revenue that section 40A (5) was complete code covering payments by company to its employees in form of salary, remuneration and perquisites and, therefore, no item could be said to fall outside these categories. It was emphasized that while 'perquisite' was given exhaustite definition by Explanation 2(b) to section 40A (5) by using expression 'perquisite means', term 'salary' was not given exhaustive definition by Explanation 2(b) and only inclusive definition of section 17(1) was grafted in said Explanation and, therefore, whatever does not fall under head 'perquisite' would be covered under inclusive definition of 'salary. It was urged that in this context ordinary meaning of word 'perquisite' cannot take away force of enactment nor defeat its object. Reliance was also placed on notes on Clauses in Finance (No. 2) Bill, 1971 in [1971] 80 ITR (St.) 147 where dealing with clause 10 it was observed: "... 'salary' is being defined broadly on lines of provision in section 17 of Income-tax Act, subject to certain modifications. expression 'salary' will include wages; any annuity or pension; any gratuity, any fees, commissions or profits in lieu of or in addition to any salary or wages ... It will, however, not include perquisites ..." It was, therefore, urged that reimbursement of medical expenses having been held to be not perquisite in view of expression 'whether convertible into money or not' governing expression 'perquisite' in section 40A (5) (a) (ii) and thus restricting its ordinary meaning, cash reimbursement would necessarily fall under 'salary' in view of inclusive and wide definition of 'salary' in section 17(1) , read with section 17(3) and in view of clear enuciation of law by Tribunal, Special Bench, Bombay in Blackie & Sons. (India) Ltd.'s case (supra). 51. We see merit in revenue's contentions. While definitions of 'salary' and 'perquisite' in section 17(1) are inclusive, in Explanation 2(b) to section 40A (5) exclusive and exhaustive definition of 'perquisite' was given as per clause (b) covering only five categories enumerated therein, but in respect of 'salary', inclusive definition of section 17(1) was adopted, which means that what is not covered by five categories of 'perquisite' would fall in net of 'salary' in view of 'salary's' inclusive definition in section 17(1). We have already noted that section 17(3) defining 'profits in lieu of salary' includes under sub-clause (ii) any payment due to or received by employee from employer. Thus, all payments by employer to employee, which are held to be not perquisite like reimbursement of medical expenses, would necessarily be covered under 'salary. In this connection, revenue is right in relying on Finance Minister's speech as well as notes on clauses to show Legislature's intention in introduction section 40A (5) to put curb on salaries, remunerations and perquisites paid by companies to its high executives. 'mischief rule' as enunciated in Heydon's case 3 Co. Rep. 7a, of Maxwell on Interpretation of Statutes, Twelfth edn. is: "... that for sure and true interpretation of all statutes in general (be they penal or beneficial, restrictive or enlarging of common law) four things are to be discerned and considered: (1st) What was common law before making of Act. (2nd) What was mischief and defect for which common law did not provide. (3rd) What remedy that Parliament had resolved and appointed to cure disease of commonwealth. And, (4th) true reason of remedy; and then office of all Judges is always to make such construction as shall suppress mischief, and advance remedy, and to suppress subtle inventions and evasions for continuance of mischief, and p r o privato commodo, and to add force and life to cure and remedy, according to true intent of makers of Act, pro bono publico ..." (p. 40) 52. Thus, in view of declared intention of Legislature to curb high salaries and perquisites of senior executives of companies, we have to interpret section 40A (5) so as to advance remedy and to suppress subtle inventions and evasions for continuance of mischief, and to add force and life to cure and remedy, according to true intent of makers of Act. Thus, to hold that reimbursement of medical expenses would neither be covered under 'salary' nor under 'perquisite' would be to defeat purpose of legislation. 53. Maxwell on Interpretation of Statutes under head 'Construction ut res magis valeat quam pereat' observed: "If choice is between two interpretations, narrower of which would fail to achieve manifest purpose of legislation, we should avoid construction which would reduce legislation to futility and should rather accept bolder construction based on view that Parliament would legislate only for purpose of bringing about effective result.' 'Where alternative constructions are equally open, that alternative is to be chosen which will be consistent with smooth working of system which statute purports to be regulating; and that alternative is to be rejected which will introduce uncertainty, friction or confusion into working of system." (p. 45) Applying above principle, we have to avoid interpretation which would make provisions of section 40A (5) ineffective in curbing mischief which Legislature intended. 54. Sampath Iyengar in Law of Income-tax, Seventh edn., Vol. 1 under section 17 under head "4. 'Perquisites' sub-section (2). -'Perquisite', meaning of ", observed: "Formerly, word 'perquisite' was used to denote emoluments not fixed generally and granted mostly ex gratia, whether in cash or in kind, it denoted benefit, amounts or advantage mostly in kind enjoyed by employee at cost of employer, generally in addition to salary or wages to which he is entitled. Perquisites are, in many cases, in nature of voluntary payments attached to office or employment, such as fee of any clerk serving under barrister, but in some cases, there may also be legal obligate to pay, though, in common parlance, one rarely used term 'perquisites' where payment is claimable as of right. Voluntary or not, when actually paid, they fall to be taxed. Their characterstic is that they are payable only during continuance of employment and are directly dependent upon service. They cease when employment ceases." (p. 970) 55. At same page, commentator noted that 'the grant or allowance of perquisites .... has become regular feature of almost all employment, ... statutory definition of salary and wages had, therefore, to be enlarged as to comprehend most common forms of advantages and benefits enjoyed by employee ...' 56. While dealing with 'profits in lieu of salary' under section 17(3) at page 983 under paragraph 14(c) 'other payments received from employer-clause (ii)', commentator noted that "any payment due to or received by assessee from his employer ... is taxable as 'profits in lieu of salary'." "... This is comprehensive provision by virtue of which all payments made by employer to employee whether made in pursuance of legal obligation or voluntarily are brought under 'profits in lieu of salary." 57. We further note that Kerala High Court in Travancore Tea Estates Co. Ltd. v. CIT [1985] 153 ITR 444 observed at p. 455 that cash payments made by employer to employee as cash allowance was not covered under definition of 'perquisite' as per clause (b) (iv) of Explantion 2 to section 40A (5) and that said expenditure was expenditure or payment coming under section 40A (5) (a) (i) which covers any expenditure which results directly or indirectly in t h e payment of any salary to employee. Court, therefore, held that car allowance was, thus, cash payment periodically made in addition to salary, and, therefore, partook of nature of salary. 58. In this context, we also note that Delhi High Court in Instalment Supply (P.) Ltd. v. CIT [1984] 149 ITR 457 was dealing with disallowance under section 40(a) (v) of reimbursement by employer company of medical expenses incurred by managing director in assessment year 1969-70 and 1970-71 when said provision was in force. [Section 40(a) (v) was deleted and substituted by section 40A (5) with effect from 1-4-1972] Delhi High Court in CIT v. Commonwealth Trust Ltd. [1982] 135 ITR 19 where it was held that house rent allowance paid by employer company to its employee was perquisite and words 'whether convertible into money or not' qualifying words 'benefit, amenity or perquisite' would not exclude cash payments by employer to employee and contrary construction accepted by Karanataka, Calcutta and Madras High Courts was irrational defeating very purpose of section 40(a) (v). Kerala High Court, therefore, held that house rent allowance received by employee from employer was covered by section 40(a) (v). 59. Delhi High Court, however, fell in line with aforesaid three High Courts, who, in Mysore Commercial Union Ltd.'s case (supra), Kanan Devan Hills Produce Co. Ltd.'s case (supra) and Manjushree Plantations Ltd.'s case (supra) had taken view that expression 'whether convertible into money or not' qualifying words 'benefit, amenity or perquisite' excluded cash payments made by employer to employee. Delhi High Court in this context had noted at page 462 contentions by assessee's counsel: 'According to him, any cash payment made by company to its employee would be part of salary. High Court at page 465 observed: 'Any cash payment could well be part of salary as given in section 17 of Act'. Delhi High Court accordingly held that reimbursement of medical expenditure of managing director was not 'benefit, amenity or perquisite', whether convertible into money or not, and, therefore, section 40(a) (v) did not apply to cash payments by employer to employee. [The question regarding medical reimbursement expenses being part of salary was not referred to Delhi High Court as under section 40(a) (v) fell only expenditure on provision of benefit, amenity or perquisite]. We may elucidate by referring to legislative chances. Section 40(c) (iii), as amended by Finance Act, 1964, put ceiling of one-fifth of salary, on all expenditure on employees resulting in benefit, amenity or perquisite. This clause was substituted by section 40(a) (v) with effect from 1-4-1969 which put further ceiling of Rs. 1,000 per month on expenditure o n benefit, amenity or perquisite to employee. Section 40(a) (v) was substituted by section 40A (5) with effect from 1-4-1972 which put ceiling on salary to employees of Rs. 5,000 per month, besides ceiling on perquisites of Rs. 1,000 per month and one-fifth of salary. Similarly, on directors of company, overall ceiling of Rs. 72,000 was imposed with effect from 1-4-1972 under section 40(c) in respect of expenditure on remuneration, benefit, amenity, etc. Thus, before 1-4-1972, there was no controversy whether expenditure was covered by salary or perquisite. In case of employee of company, Legislature was concerned only with curbing perquisites, benefits or amenities. Legislature was not concerned about quantum of salary of employees. In respect of director of company, Legislature was concerned only with reasonableness of total expenditure on director as remuneration, benefit, amenity or expenditure or allowance in respect of company's assets. 60. In this context, we may also note that head-note in Mysore Commercial Union Ltd.'s case (supra) is incorrect insofar as it is indicated that house rent allowance is not perquisite 'or part of salary. All that High Court held at page 342 was that payment of house rent allowance or bonus is not perquisite because of expression 'whether convertible into money or not' qualifying words 'benefit, amenity or perquisite'. 61. We are, therefore, of view that reimbursement of medical expenses being cash payment by employer to employee would fall under 'salary' in view of very wide and inclusive definition of 'salary' as per section 17(1) which is adopted by clause (a) of Explanation 2 of section 40A (5) , i n contradistinction to only five enumerated categories being covered under 'perquisite' as per clause (b) of said Explanation 2 to section 40A (5). Thus, salary would cover any perquisite not falling in said five categories of perquisites and particularly cash payment [being hit by expression 'whether convertible into money or not' qualifying 'perquisite' in section 40A (5) (a) (ii)]. We have already noted above view taken by Special Bench in Blackie & Sons. India Ltd.'s case (supra) that section 17(3) by giving inclusive definition of 'profits in lieu of salary' [appearing in section 17(1) (iv)] covered in its sub-clause (ii) any payment due to or received by employee from employer. We note that said sub-clause excluded from purview of salary, following payments: (A) death-cum-retirement gratuity-section 10(10) of Act (B) payment in commutation of pension-section 10(10A) (C) compensation on retrenchment received by workmen under Industrial Dispute Act, 1947-section 10(10B) (D) payment from provident fund to which Provident Funds Act, 1925 applies-section 10(1) (E) accumulated balance in provident fund becoming payable to employee- section 10(12) (F) house rent allowance-section 10(13A). However, under said sub-clause, payments from provident fund or other fund (not being approved superannuation fund) are included under salary to extent it does not consist of contributions by employee or interest on such contributions. 62. From above narration, it would be clear that but for exclusion provided in said sub-clause, said payments would have been treated as salary though taking ordinary meaning of payments 'in lieu of salary', nobody would consider such payments to be in lieu of or instead of or in substitution of salary. This shows that said section 17(3) (ii) was very wide in its sweep, despite its rather deceptive or inelegant descriptions as 'profits in lieu of salary'. 63. We further observe that clause (iv) of section 17(1) besides taking in its sweep 'profits in lieu of salary', also covers 'profits in addition to any salary'. Thus, any payments received by employee from his employer under terms of service contract or otherwise would be fully caught in net of 'profits in addition to any salary'. 64. We further note that clause (i) of section 40A (5) (a) covers 'any expenditure which results directly or indirectly in payments of any salary'. Salary is recompense for services rendered. While salary (paid periodically) is direct payment: any benefit or advantage or amenity received by employee from employer would be direct payment of salary and would thus be clearly covered by said clause (i) of section 40A (5) (a). 65. For above reasons, we see no ground to depart from view taken by Special Bench, Bombay, in Blackie & Sons' case (supra). We would accordingly hold that reimbursement of medical expenses being cash payment was rightly treated as part of salary for computing disallowance under section 40A (5). Position is different wile assessing perquisite of medical reimbursement in hands of employee under section 17 in view of CBDT circulars. Circular No. 336 dated 16-4-1982 [See TAXMANn's Direct Taxes Circulars, VOl. 1, 1985 edn., p. 163] directed that only medical reimbursement in excess of one month's salary is to be included in hands of employee. Circular No. 376 dated 6-1-1984 [See TAXMANn's Direct Taxes Circulars, Vol. 1, 1985 edn., p. 163] clarified that only reimbursement in excess of Rs. 5,000 was includible. However, Circular No. 445 dated 31-12-1985-[1986] 24 TAXMAN (St.) 111 exempted all expenditure in recognised public hospital in India. 66. We may further observe that position under section 40(c) is clearly against assessee as above argument is not available to assessee because word 'perquisite' does not appear in section 40(c) (i) which only uses words 'remuneration or benefit or amenity'. Further, restrictive phrases 'whether convertible into cash or not' is missing in said clause. Under these circumstances, reimbursement of medical expenses to director by employer company should clearly be hit by section 40(c) (i) because it is expenditure which results directly or indirectly in provision of 'remuneration or benefit or amenity' to director. 67. Thus, both under section 40A (5) as well as under section 40(c) , reimbursement of medical expenses by employer company to employer would form part of remuneration of employee and in case of director, any payment in excess of Rs. 72,000 would have to be disallowed. In case of employees simpliciter, provisions of section 40A (5) would apply and, therefore, considering medical reimbursement as part of salary, perquisites in excess on one-fifth of salary have to be disallowed. AS from computation given to us, it is to clear how disallowance has been computed by ITO, we direct ITO to examine if any recomputation of disallowance is called for in light of our directions above. Ground No. 1: 68. assessee is aggrieved against disallowance of depreciation on assets used by assessee for conducting scientific research. These assets were installed in earlier years for which deduction equivalent to full cost has already been allowed to assessee under section 35 of Act. ITO rejected assessee's claim for depreciation and Commissioner (Appeals) upheld it in view of amendment of section 35(2) (iv) by Finance (No. 2) Act, 1980. Under similar circumstances, Madras High Court in CIT v. Lucas TVS Ltd. [1984] 149 ITR 771 has held that depreciation cannot be granted for subsequent year on assets on which relief under section 35(2) equivalent to full cost has already been allowed. assessee, however, contends that constitutionality of aforesaid amendment in 1980 is under challenge before Supreme Court and, therefore, ITO be directed to abide by decision of Supreme Court. We direct accordingly. Ground No. 4: 69. Foreign travel expenses of Rs. 19,783 of Mrs. Bhoothalingam, wife of chairman of board of directors of assessee-company, was disallowed by ITO after observing that assessee was unable to produce any resolution of board of directors to sanction said visit by wife who accompanied her husband on foreign visit and, thus, according to ITO, there was no evidence that her visit and, thus, according to ITO, there was no evidence that her visit served business interest of assessee-company. Commissioner (Appeals) vide paragraph 9 noted assessee's contention that Mr. Bhoothalingam had gone abroad for business discussion with assessee- company's British Associates and had also visited France and Italy where assessee-company had also its associates and that on such visits it was customary for meeting at social level that chairman should be accompained by his wife. Commissioner (Appeals), however, rejected assessee's contention on ground that business connection of wife's visit was too far-fetched. 70. AT hearing before us, our attention was drawn to companies application to Reserve Bank of India for release of foreign exchange for chairman and his wife and application form indicated that they were proceeding abroad for business purposes. Reserve Bank of India sanctioned on 7-5-1975 foreign exchange of pounds 840 for Mr. Bhoothalingam and pounds 210 for his wife for their stay of 40/42 days in UK, Italy and France. learned counsel for assessee reiterated that wife accompanyinhg husband (chairman) was in business interest. Reference was made to company's application dated 18-4-1975 to Assistant Controller, Exchange Control Department, Rserve Bank of India, indicating that chairman and chief executive of 'Glaxo Holdings' had extended invitation to Mr. & Mrs. Bhoothalingam and that wife was accompanying her husband as number of social engagements were included in programme. Reliance was placed on Taxes & Planning dated 15-7-1984 decision of Tribunal Bombay Bench in ITO v. XYZ & Co. India Ltd. [IT Appeal Nos. 2606 and 2607 (Bom.) of 1982] where in paragraph 22 Bench upheld Commissioner (Appeals)'s order that wife accompanying husband abroad (who is director of company) was in business interest. 71. revenue relied on CIT v. T. S. Hajee Moosa & Co. [1985] 153 ITR 422 (Mad.) and Bombay Mineral Supply Co. (P.) Ltd. v. CIT [1985] 153 ITR 437 (Guj.). In first case, wife had accompaanied husband on foreign tour. husband was paartner of firm and wife had accompanied him because of husband's indifferent health. Madras High Court held that wife's travelling expenses were in nature of personal expenses and even assuming that expenditure related to business purposes, expenditure had dual and twin purpose and served not only purposes of business but also personal or private purpose and as expenditure did not exclusively serve business, it was not allowable under section 37(1) of Act. In second case, Gujarat High Court was considering case of director of compa ny keeping indifferent health and his wife accompanying him on foreign tour. It w s urged before Gujarat High Court that in case wife has not accompanied husband, company would have had to engage nurse. High Court still held that expenses being personal, were not allowable as wife was not qualified or trained nurse. 72. In both above cases, assessees were unable to prove that wife accompanied husband for business consideration. case before us is, therefore, entirely different where it is claimed that wife accompanied husband because considerations. In modern age, and more so in Western countries, senior excutives are, as matter of social custom, ccompanied by their wives when visit, though for business purposes, has necessarily some social aspects also. Under these circumstances, we hold that expenditure of Rs. 19,783 which includes air- fare of Rs. 15,656 and foreign exchange of Rs. 4,022 equivalent to pounds 210 is allowable expenditure. Ground No. 5: 73. ITO rejected assessee's claim of deduction of surtax and Commissioner (Appeals), following Tribunal Special Bench, Bombay decision i n Amar Dye-Chem Ltd. v. ITO [1983] 3 SOT 384, upheld disallowance. In Molins of India Ltd. v. CIT [1983] 144 ITR 317 (Cal.), A. V. Thomas & Co. Ltd. v. CIT [1986] 159 ITR 431 (Ker.) and Sundaram Industries Ltd. v. CIT [1986] 26 Ta xman 187 (Mad.), similar view has been taken. We, accordingly, uphold orders of lower authorities on this point. 74. In result, appeal is partly allowed. *** GLAXO LABORATORIES (INDIA) LTD. v. INCOME TAX OFFICER