Commissioner Of Income-Tax v. H.S Sandhu

1. The Income-tax Appellate Tribunal, Chandigarh Bench, has referred the following two questions of law, which arose out of its order dated August 18, 1992, for the assessment year 1989–90 for the opinion of this court:

“1. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal is right in law in allowing deduction at 40 per cent, of incentive bonus, when the assessee had not actually incurred expenses to the extent of 40 per cent, wholly, necessarily, exclusively as provided under section 10(14) of the Income-tax Act, 1961?

2. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal is right in law in allowing deduction of additional conveyance allowance under section 10(14) when the assessee had not actually incurred the amount wholly, necessarily, exclusively for his development duties?”

2. Question No. 1 is concluded by the judgment of this court in Income-tax References Nos. 105 and 106 of 1986, decided on October 27, 1998, in the case of B.M Parmar, Development Officer, LIC v. CIT, [1999] 235 ITR 679, wherein the question has been answered in favour of the Revenue and against the assessee. In that view of the matter, this question is answered in the negative, i.e, in favour of the Revenue and against the assessee.

3. So far as question No. 2 is concerned, the Tribunal has not given any independent finding on this question, but has decided the same by adopting the same reasoning which related to question No. 1, referred to above. We find that the Income-tax Officer had granted the additional conveyance allowance under section 10(14) of the Income-tax Act to the tune of Rs. 30,000 as against Rs. 51,305 claimed by the assessee.

4. A sum of Rs. 30,000 was allowed on the basis of the certificate issued by the Branch Manager, LIC, Madhopur. The same was the view taken by the Commissioner of Income-tax (Appeals).

5. On a consideration of the matter, we are of the view that the Income-tax Officer as also the Commissioner of Income-tax (Appeals) correctly interpreted section 10(14) of the Act and had allowed Rs. 30,000 on account of additional conveyance allowance. Thus this question is also answered in the negative, i.e, in favour of the Revenue and against the assessee.

6. Reference is answered accordingly. No costs.