1977 (11) TMI 71 - AT - Income Tax

Summary

Issues:
- Deduction allowable under s. 16(i) for an assessee receiving salary from multiple employments.

Analysis:
The judgment focused on the deduction allowable under s. 16(i) for an assessee who received salaries from two different companies in a particular assessment year. The primary issue revolved around whether the assessee was entitled to separate deductions for each salary or if the deduction was limited due to the total amount of salaries received exceeding a certain threshold. The Income Tax Officer (ITO) had disallowed a separate deduction for a portion of the claim based on this threshold. The Appellate Tribunal analyzed the relevant provisions of s. 16(i) and emphasized the language used in the statute, which indicated a clear relationship between a specific employment and the calculation of deductions. The Tribunal highlighted that the computation of income under the head 'Salaries' required aggregating the amount taxable for each distinct source of income, i.e., each employment. The Tribunal rejected the argument that the word 'employment' in s. 16(i) should be interpreted collectively, stating that it did not align with the language and scheme of the relevant sections. The judgment concluded that the assessee was indeed entitled to a standard deduction from the salary derived from each of the two employments in the assessment year. It was clarified that the restriction under s. 16(i) limited the deduction to a specific amount, resulting in a partial allowance of the appeal.