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TMI Blog1988 (12) TMI 157X X X X Extracts X X X X X X X X Extracts X X X X ..... 449 1983-84 13,933 2. The learned departmental representative relied on a decision of the Tribunal in the case of ITO v. L.N. Goswami [1984] 8 ITD 661 (Cal.). This was a case where the Tribunal took the view that the additional conveyance allowance was granted to the Development Officer as an incentive for bringing in additional business and in any view of the matter it could not be said that it was specifically granted to meet travelling expenses wholly, necessarily and exclusively within the meaning of section 10(14) of the I.T. Act. It was submitted that in this order the Tribunal had examined the entire scheme under which the additional conveyance allowance was paid by the LIC of India. The learned departmental representative also r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion also recognises that the results of such travelling are automatically reflected in the first year premium receipts accruing to the Corporation out of the new businesses secured by the agents with the active guidance and participation of the Development Officers and that is why the conveyance allowance is linked to their premium income. This conveyance allowance cannot be treated as additional remuneration for services rendered camouflaged in the form of conveyance allowance. This is so as there is separate scheme for payment of incentive bonus again on the basis of premium income with reference to which conveyance allowance is also paid. I would therefore hold that the Appellate Asst. Commissioner was not justified in concluding that a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2-9-1988, has no application because in deciding the issue it was observed by the Court as under :--- " The submission of Sri Upadhyaya is that these allowances do not amount to 'income' under the provisions of the Income-tax Act, 1961 (hereinafter referred to as the Act, 61) and, therefore, they are not liable to tax. Sri Upadhyaya being very firm in his submission that these allowances are not in the nature of income, no argument in alternative was made to claim exemption under section 10 of the Act, 1961, in respect of such receipts. So the only question for consideration is whether the receipts on account of CCA, HRA and DA are in the nature of income entailing tax liability. " In the judgment of the Andhra Pradesh High Court Maddi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly incurred in the performance of the duties of the person concerned, we consider that a practical approach would be to hold that a major portion of the expenditure would have been incurred only for the purpose of discharging duties, since a general formula could have been evolved by the L.I.C. on the basis of such criteria and if at all, on estimate, a small margin can be disallowed. We would fix the amount which could be disallowed u/s. 10(14) at 20% of the claim of the additional conveyance allowance for each of the years. The remaining amount will be allowed in each year as a deduction which fully satisfies the requirements of section 10(14). 5. In coming to the aforesaid conclusion we have noticed the argument of the learned departme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts to persuade them to take out L.I.C. policies, etc. The Tribunal took the view that the whole of the incentive amount could not be considered as expenditure wholly, necessarily, and exclusively incurred in the performance of duties but a portion thereof had necessarily to be spent in the performance of such duties. The Tribunal was of the view that 40% of the incentive bonus could be as satisfying the requirements of section 10(14) and, therefore, they allowed the said deduction. We would follow the same decision in the present case also and since the I.T.O. has allowed only 40% deduction from the gross incentive bonus, we are of the view that the C.I.T. was not justified in considering that the order of the I.T.O. was prejudicial to reve ..... X X X X Extracts X X X X X X X X Extracts X X X X
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