9911796707
TMI Blog2002 (10) TMI 234X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. The assessee is a Development Officer in LIC of India working in its Mavelikkara Branch. During the previous year relevant to the assessment year under appeal, the assessee had received a sum of Rs. 16,90,008 by way of Incentive Bonus. While computing the income, the assessee claimed a deduction of 35% from the said Incentiye Bonus by way of estimated expenditure. The Assessing Officer found that the Income-tax Appellate Tribunal, Cochin Bench has decided a similar issue in ITA No.651 (Coch.)/91 dated 21-9-2000 wherein the Tribunal has directed to allow 30% of the Incentive Bonus by way of expenditure. The Assessing Officer followed the said decision of the Tribunal and allowed 30% of the Incentive Bonus as deduction by way of expenditu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there is a substantial difference in the position of law that applied to the earlier assessment years considered by the High Court in the case of T.K. Ginarajan and the impugned assessment year 1998-99 considered by the Assessing Officer. The learned Chartered Accountant pointed out that the situation has changed by virtue of the amendment introduced by the Finance Act, 1995. As per the said amendment, reimbursement of expenditure embedded in the Incentive Bonus could be deducted in computing the income, provided such exemption is notified under section 10(14) of the Income-tax Act, 1961. The learned Chartered Accountant pointed out that the details are available in the Incentive Bonus Scheme, 1997 formulated by the Life Insurance Corporat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ious that the LIC of India could not convince the Central Board of Direct Taxes that any part of inventive bonus is a reimbursement of expenses. We are told that the LIC of India has now changed their pattern of payment of incentive bonus which is now split into two parts, 70 per cent representing income and 30 per cent towards reimbursement of expenditure. Since the cases before us do not pertain to any assessment after the introduction of the st1parate payment by the LIC of India, we are not going into the eligibility of the claim for deduction of 30 per cent now separately given by the LIC of India." 5. We considered the arguments of the learned Chartered Accountant made on the basis of the facts. We agree with his arguments. The Hon'b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case was rendered on 2-11-2001. Therefore it is clear that the Tribunal's order was available before the Assessing Officer at the time of assessment without being disturbed by the High Court. As per the judicial discipline and also as per the law laid down clearly in the statute, the Assessing Officer is bound to follow the order of the jurisdictional Tribunal. Therefore, in this case the Assessing Officer has done the right thing in law in following the decision of the Appellate Tribunal on the subject. Therefore, the assessment cannot be branded as erroneous on that ground. The learned Chartered Accountant relied on the decision of the Hon'ble Allahabad High Court in K.N. Agrawal v. CIT[1991] 189 ITR 769 where the Court has held that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f section 263 cannot be invoked to correct each and every type of mistake or error committed by an Assessing Officer, but it could be used only when an order is erroneous and prejudicial to the interests of Revenue. 7. On this legal ground also we are inclined to accept the contention of the learned Chartered Accountant. As rightly pointed out by him, the Assessing Officer is bound to follow the order of the jurisdictional Tribunal. The Assessing Officer was in fact following such an order passed by the Tribunal in ITA No.651 (Coch.)/91 dated 21-9-2000. There was no decision of the High Court before the Assessing Officer in which the said order of the Tribunal was set aside or over-ruled. Therefore, the Assessing Officer was exercising hi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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