1983 (1) TMI 106 - AT - Wealth-tax

Summary

Issues:
1. Exemption under section 10(5) of the Income-tax Act, 1961 for hotel charges during leave period.
2. Interpretation of provisions of section 10(5)(ii) in relation to travel concession or assistance.
3. Whether hotel charges during leave period are covered by section 10(5)(ii) for exemption.

Detailed Analysis:

1. The judgment pertains to the assessment year 1979-80 of an individual employed by multiple companies. The individual claimed Rs. 5,250 as exempt under section 10(5) of the Income-tax Act, 1961 for expenses incurred during leave, including hotel charges. However, the Income Tax Officer (ITO) disallowed the exemption for hotel charges amounting to Rs. 2,750, stating that only the fare was eligible for exemption under section 10(5) read with rule 2B of the Income-tax Rules, 1962.

2. The Appellate Assistant Commissioner (AAC) confirmed the disallowance, citing that the travel concession or assistance should not exceed the amount granted to Central Government employees. The appellant argued that hotel charges during leave period fall under section 10(5)(ii) as 'assistance' covers all expenses related to the leave. The departmental representative contended that the interpretation of section 10(5)(ii) is influenced by rule 2B and emphasized the term 'assistance' in connection with travel.

3. The Appellate Tribunal analyzed the provisions of section 10(5)(ii) and concluded that 'travel' should be read with both 'concession' and 'assistance'. It held that 'travel assistance' refers to a form of traveling aid, and hotel charges during leave do not qualify for exemption under section 10(5)(ii). The Tribunal dismissed the appeal, confirming the disallowance of hotel charges for exemption.

In summary, the judgment dealt with the interpretation of provisions regarding exemption under section 10(5) of the Income-tax Act, specifically focusing on whether hotel charges during leave period are covered by section 10(5)(ii) for exemption. The Tribunal held that hotel charges do not fall under the exemption criteria, emphasizing the term 'travel assistance' in connection with travel concessions.