Reimbursement of overseas medical cost a perk

The above decision of the Rajasthan High Court deals with an important issue, viz, whether reimbursement by an employer of medical expenses incurred by an employee abroad would be perquisite in the hands of the employee.
The facts of the case were that the respondent assessee, when he was in the US for work, had to undergo a bypass, incurring an expenditure of Rs 5.2 lakh which was reimbursed by the employer. The sum was taxed by the Assessing Officer as a perquisite, while the Commissioner (Appeals) and Appellate Tribunal held it was not taxable.
On reference, the high court held that the amount was taxable as a perquisite. The Court stated that sub-clause(iii) of clause (2) of section 17 provides that the value of any benefit provided free of cost by an employer to its employee should be treated as a perquisite within the meaning of that expression. Further the CBDT had clarified that if medical expenses were incurred by an employee (a) in India (b) in a public hospital, the reimbursement should not be treated as perquisite in the hands of the employee. No such benefit could be extended if the treatment was outside India. In view of the above, there was no justification to confirm the view taken by the Tribunal.
Dishonour of cheque — relationship not important
Goa Plast vs Chico Ursula D’souza (SC), 2003, 117 — Comp Cas p 781

The SC judgement emphasises an oft overlooked aspect in cases of cheque bouncing, viz, that when a drawer issues a cheque there is a presumption that the holder of the cheque received it for discharge in whole or part of a debt or liability. It is for the drawer of the cheque to rebut the presumption.
The facts of the case were that the respondent who was former MD of the petitioner company and whose services had been terminated, issued soon thereafter 10 post-dated cheques for Rs 40,000 each in favour of the appellant company for payment towards liability for the amount misappropriated from the appellant company.
He also addressed a letter to the company to the effect that he was discharging the liability of another party towards the company and that he himself had no liability towards the company. The company deposited the first cheque; the cheque was dishonoured by the bank on the ground that the respondent had issued instructions to stop payment.
Criminal proceedings were started by the company under sec 138 of the Negotiable Instruments Act. The appellant examined the company’s general manager to prove the complaint. The respondent did not examine any witness or subject himself to cross-examination. He only brought on record the letter written by him to the company denying his liability. The magistrate held in favour of the respondent on the ground that he had rebutted the statutory presumption under sec 139 of the Act.
The HC acquitted him on the ground that the relationship between the appellant and respondent was that of employer and employee and there being no business or commercial or mercantile relation between the parties and in view of the letter of the respondent denying responsibility, the company had failed to prove its case.

In appeal, the SC held against the respondent. The Court stated that unless the contrary is proved, sec 139 creates a presumption that the holder of a cheque received it in discharge of a liability. The letter of the respondent was not proved. Further, the letter did not deny the liability but shifted it to a third party. The findings of the HC that sec 138 has application only to cases of mercantile transactions was legally perverse.
All the ingredients required under sec 138 were present.