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Issues: Admissibility of standard deduction for expenses incidental to employment under section 16 of the IT Act.
Analysis: 1. The case involves two appeals by the same assessee for the assessment years 1977-78 and 1980-81, questioning the admissibility of standard deduction for expenses incidental to employment under section 16 of the IT Act. The primary contention was whether the assessee was entitled to separate standard deductions for each employment subject to the maximum limit of Rs. 3,500, or if the deduction should be limited due to the provision of a car for personal use by one of the employers common to both years. 2. The Tribunal considered the interpretation of section 16, which provides for a standard deduction in respect of expenditure incidental to employment. It was noted that a person can be an employee of multiple employers and receive salary from various sources. The section allows for a maximum deduction of Rs. 3,500, with a proviso limiting the deduction to Rs. 1,000 if a conveyance allowance or a motor car is provided by the employer. The Tribunal relied on previous decisions to support the assessee's claim for separate standard deductions for each source of salary income, beyond the Rs. 3,500 limit but within the limit for each particular employment. 3. For the assessment year 1977-78, the assessee had salary income from two employers, entitling him to a standard deduction of Rs. 3,500 instead of the Rs. 1,000 allowed by the Income Tax Officer (ITO). The Tribunal allowed the deduction, providing relief of Rs. 2,500 to the assessee. 4. In the assessment year 1980-81, the assessee received salary from two employers, justifying a standard deduction of Rs. 3,400 instead of the Rs. 1,000 allowed by the ITO. The Tribunal granted the deduction, offering relief of Rs. 2,400 to the assessee. 5. Consequently, both appeals were allowed by the Tribunal, directing the ITO to make necessary adjustments in accordance with the allowed deductions for each assessment year.
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