COMMR. OF INCOME TAX, MADRAS vs BRAKES INDIA LTD., MADRAS.

The Supreme Court interpreted Section 40(c)(iii) of the Income Tax Act, which restricts the deduction of perquisites exceeding one-fifth of the salary of an employee. The Court held that the exemption under Section 10(6)(vii) does not apply if the salary exceeds Rs. 7,500, thus affirming the Tribunal's decision to disallow certain perquisites. The Court concluded that the provisions of Section 40(c)(iii) were rightly invoked for the assessment year 1965-66 regarding the remuneration of the foreign technical director.