1994 (10) TMI 108 - AT - Income Tax

Summary

Issues:
1. Exemption of personal pay for undergoing Vasectomy operation under section 10.
2. Disallowance of compulsory deductions towards Provident Fund, CGHS, and CGEIS.

Analysis:
1. The assessee appealed against the order disallowing the exemption claimed for personal pay granted for undergoing a Vasectomy operation. The DCIT(A) disallowed the amount as it did not fall under the definition of "income." The DCIT(A) also disallowed deductions towards CGHS and CGEIS. The DCIT(A) observed that there was no specific award approved by the Central Government for the Vasectomy operation, hence no exemption could be granted. The assessee contended that the personal pay was in the nature of an award/reward exempt under section 10(17A)/(17B). The Tribunal rejected the claim, stating that the personal pay did not qualify as an award/reward under section 10 and lacked the necessary criteria for exemption.

2. Regarding the compulsory deductions towards Provident Fund, the assessee argued for their exemption based on the principle that if there is any diversion of income at source under any statute or by overriding title, then there is no income to the assessee. The DCIT(A) disallowed the deductions, stating they were ultimately refundable to the assessee with interest and served a social security purpose. The Tribunal upheld the DCIT(A)'s decision, emphasizing that the deductions were for the benefit of the employee and did not erode the real income. The Tribunal found no reason to interfere with the DCIT(A)'s orders on this matter.

3. The Tribunal noted that the other grounds of appeal were not pressed by the assessee and were consequently rejected. Ultimately, the Tribunal dismissed the appeal of the assessee, upholding the orders of the DCIT(A) regarding the disallowance of exemptions for personal pay and compulsory deductions towards Provident Fund.