1985 (6) TMI 76 - AT - Income Tax

Summary

Issues:
1. Exemption claim under section 10(14) of the Income-tax Act, 1961 for conveyance allowance.
2. Claim of additional deduction at the rate of 40 per cent of the incentive bonus.

Analysis:
1. The appeal involved the assessee, a Development Officer in the Life Insurance Corporation (LIC), claiming exemption under section 10(14) of the Income-tax Act, 1961 for a conveyance allowance received from LIC. Initially, the assessee claimed exemption for only a portion of the amount but later revised the claim to seek exemption for the entire sum. The Income Tax Officer (ITO) disallowed a portion of the claimed amount as the assessee failed to provide evidence of actual expenditure incurred for official duties. The Appellate Authority Commissioner (AAC) upheld the ITO's decision, rejecting the assessee's argument for an additional deduction based on a Chandigarh Bench decision. The assessee, during the appeal, presented the salary certificate and circular issued by LIC to support the claim. The tribunal held that the entire amount should be exempt under section 10(14) as the allowance was essentially a reimbursement of official expenses, not just an allowance.

2. The second issue pertained to the claim of an additional deduction at the rate of 40 per cent of the incentive bonus. The departmental representative argued that without detailed evidence, such a deduction cannot be allowed. The tribunal noted that the assessee had not raised this claim before the ITO, and the AAC had rejected it citing the need for further examination. Relying on a Calcutta High Court decision, the tribunal rejected the additional deduction claim, stating that the relief already granted covered all actual expenditure incurred. Consequently, the tribunal partly allowed the appeal of the assessee.

This judgment clarifies the criteria for claiming exemption under section 10(14) for conveyance allowance and emphasizes the importance of providing evidence to support deduction claims. It also highlights the significance of raising all deduction claims at the appropriate stages of assessment to avoid subsequent rejections.