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TMI Blog1990 (12) TMI 130X X X X Extracts X X X X X X X X Extracts X X X X ..... from the assessment. The returns were filed accordingly which is accepted by the ITO. 3. The CIT was of the opinion that the order of the ITO is erroneous and prejudicial to revenue. He held that the assessee's claim for exemption under section 10(14) in respect of additional conveyance allowance should be considered in the background of the instructions from the CBDT which was not done. With regard to the deduction of 50% of the lncentive Bonus the CIT held that the assessee, being an employee, was not entitled to any deduction other than the deduction under section 16(i). Thus, he set aside the assessment order and directed the ITO to consider the admissibility of exemption under section 10(14) only. 4. Against this order, the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of K.A. Choudhary v. CIT [1990] 183 ITR 29. The High Court has held that Incentive Bonus received from LIC is part of salary. The definition of wages under the Payment of Wages Act, also indicates that Bonus is included in that definition. In that case, the assessee was a Development Officer of the LIC, and he claimed certain expenses from the Incentive Bonus. The Department did not accept the claim for deduction and the assessee filed a writ. Dismissing the Writ Petition, the High Court pointed out that he received the amount as bonus because he was an employee of LIC and had formed part of his salary. 6. In view of the above decision, it would be unnecessary for me to refer to the various decisions of the Benches of the Tribunal on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny part of the salary is exempt under section 10(14). In such cases, the deduction must be admitted at the point of taxation of the salary itself, i.e., the income by way of salary for the purpose of section 15 is that part of the receipt excluding the amount of such expenditure. 9. There are analogies for this purpose in the concept of computation of business income. A business loss arising out of embezzlement by an employee is not admissible under any specific section in the Income-tax Act. Nevertheless it is now an admitted position in law that in computing the income, the loss from embezzlement can be deducted under section 28 itself. The authority for this proposition is the decision of the Supreme Court in the case of Badridas Daga ..... X X X X Extracts X X X X X X X X Extracts X X X X
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