Deductions and allowances on account of car expense from salary and professional income exceeded the actual expenditure of the assessee - Income Tax - 603/CBDT

INSTRUCTION NO. 603/CBDT Dated : August 30, 1973 Section(s) Referred: 16(iv) ,32 Statute: Income - Tax Act, 1961 Instances have come to the notice of the Board where the deductions and allowances on account of car expense from salary and professional income exceeded the actual expenditure of the assessee. 2. An assessee having salary income as well as professional income can claim deduction allowance under sections 16(iv)/32 and 37 of the Income-tax Act 1961 as heads of income under the Incometax Act 1961 are mutually exclusive. But the total expenditure considered for allowance should not exceed the actual expenditure. For instance, in the case of an Advocate the total expenditure incurred by him was Rs.3823. The Incometax Officer allowed Rs.3,000 from salary income and considering the entire expenditure of Rs.3,823 again allowed 1/3rd thereof, viz Rs.1,274 as incurred for professional purposes against professional income. The Incometax Officer should have allowed in addition to Rs.3,000 either Rs.823 or if there was some personal use of the car, a part of Rs.823. Allowing Rs.4,274 against an expenditure of Rs.3,823 was clearly a mistake. 3. Necessary instructions on the lines indicated above may please be issued to the officers working in the charge.