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1. Interpretation of section 16(i) of the Income-tax Act, 1961 regarding standard deduction for an individual with multiple employments. Detailed Analysis: The appeal before the Appellate Tribunal ITAT Bombay-A involved the interpretation of section 16(i) of the Income-tax Act, 1961 regarding the standard deduction for an individual with multiple employments for the assessment year 1975-76. The assessee, an individual employed by two concerns, claimed separate standard deductions for each employment based on section 16(i). The Income Tax Officer (ITO) limited the standard deduction to the overall limit prescribed for that year, contrary to the assessee's claim. The Appellate Assistant Commissioner (AAC) allowed a further deduction based on a Tribunal order in a similar case. The revenue appealed this decision before the Tribunal. The Tribunal constituted a Special Bench to reconsider the issue in light of a previous Tribunal order and the Explanation to section 16(i) inserted by the Taxation Laws (Amendment) Act, 1984. The assessee's counsel argued that the controversy was resolved by the retrospective amendment, supporting the AAC's decision. On the other hand, the departmental representative contended that the standard deduction limit should be based on the total salary amount, irrespective of the number of employers. The Tribunal considered these arguments and the retrospective amendment in its decision. The Tribunal held that when a provision of an Act is retrospectively amended, pending assessment or appeal proceedings must align with the amended law. In this case, the Explanation to section 16(i) clarified that the maximum standard deduction would not exceed the amount specified in section 16(i), regardless of the number of employments. Therefore, the assessee was entitled to the standard deduction of Rs. 3,500 only, not separate deductions for each employment as claimed. The Tribunal reversed the AAC's decision and upheld the ITO's order, allowing the revenue's appeal. In conclusion, the Tribunal's decision clarified the application of section 16(i) for individuals with multiple employments, emphasizing that the standard deduction limit is based on the total salary amount, as per the retrospective amendment, and not separately for each employment.
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