2003 (6) TMI 194 - AT - Income Tax

Summary

Issues:
1. Alleged non-justification of the CIT(A) in restricting the deduction for additional conveyance allowance.
2. Alleged non-justification of the CIT(A) in not allowing expenses against incentive bonus and treating it as part of salary.
3. Disallowance of depreciation on the car used for earning the incentive bonus.

Issue 1:
The appeals arose from the CIT(A)'s order restricting the deduction for additional conveyance allowance claimed by the assessee. The AO observed that the assessee did not provide necessary evidence to justify the claimed amounts. The CIT(A) estimated Rs. 20,000 and Rs. 40,000 as reasonable amounts for the respective assessment years. The Tribunal found no reason to interfere with the CIT(A)'s order as the necessary evidence was not furnished by the assessee, leading to the rejection of this ground.

Issue 2:
Regarding the expenses against incentive bonus, the AO disallowed the claim as the assessee failed to maintain accounts or provide evidence for such expenses. The CIT(A) upheld the AO's decision, considering the incentive bonus as part of the salary income. The Tribunal concurred with the CIT(A) and held that the incentive bonus partakes the character of salary, thereby disallowing the deduction claimed by the assessee.

Issue 3:
The dispute over the disallowance of depreciation on the car used for earning the incentive bonus was also addressed. The CIT(A) reasoned that since the incentive bonus constituted salary income and not business income, depreciation under s. 32 for the car owned by the assessee was not admissible. The Tribunal rejected the assessee's argument, upholding the CIT(A)'s decision that the car was used for earning the salary and not for business purposes, resulting in the dismissal of this ground as well.

In conclusion, the Tribunal dismissed both appeals, affirming the CIT(A)'s orders on the issues related to the deduction for additional conveyance allowance, expenses against incentive bonus, and depreciation on the car used for earning the incentive bonus.