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TMI Blog1972 (9) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 300 being the room rent paid at Ernakulam is not an allowable deduction under section 16(v) of the Income-tax Act, 1961 ? " Now, the relevant facts of the case. The assessee who is an Income-tax Officer was posted at Ernakulam. In the return of income filed by him he claimed a deduction of Rs. 300 by way of expenses under section 16(v) of the Income-tax Act, 1961 (hereinafter referred to as " the Act "). This was the amount of room rent paid by him in Ernakulam for his stay. According to him this expenditure was met wholly and exclusively in the performance of his duties and since by the conditions of his service he was forced to stay at Ernakulam, the rent payable was wholly, necessarily and exclusively for such performance. This claim was disallowed by the Income-tax Officer and this was confirmed by the Appellate Assistant Commissioner. In the further appeal to the Appellate Tribunal the same decision was reached. The matter has been taken by way of reference to this Court at the instance of the assessee. According to the assessee he was staying alone at Ernakulam and this stay being necessitated solely by the conditions of his service he was entitled to the deductio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the expenditure claimed is wholly met in the performance of the assessee's duties or has necessarily to be so met nor is it sufficient if it is shown that it was met exclusively in the performance of the duties of the assessee. The requirement is cumulative and, therefore, it must be shown that the assessee was required to spend out of his remuneration not only wholly but also necessarily and exclusively in the performance of his duties. More important is the requirement that it is not for the performance of his duties that he had to so spend but in the performance of his dutes. According to us the term " in the performance " is much narrower in its scope than the term " for the purpose of the performance ". Many items of expenditure may be incurred by an assessee to enable him to perform his duties properly. These are not expenses incurred in the performance of the duties as the latter class is limited to those expenses incurred during the process of performance of the duties. The duties may vary depending on the office one holds. The duty, say, in regard to some officers, involve attendance at meetings and conferences and if in regard to such persons expenses are met while atten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2, deduction of expenses is permitted. That rule runs as follows : " If the holder of an office or employment of profit is necessarily obliged to incur and defray out of the emoluments thereof the expenses of travelling in the performance of the duties of the office or employment, or of keeping and maintaining a horse to enable him to perform the same, or otherwise to expend money wholly, exclusively and necessarily in the performance of the said duties, there may be deducted from the emoluments to be assessed the expenses so necessarily incurred and defrayed. " Prior to the enactment of this provision, rule 9 of Schedule E of the Income-tax Act, 1918, allowed a similar deduction and it was the application of that provision that the High Court was concerned with in the case of Nolder v. Walters. The question for determination in that case was whether a sum of pound 200 claimed by the respondent was an allowable deduction under rule 9 of the Rules in Schedule E of the Income-tax Act, 1918. The said sum of pound 200 included several claims and the claims were allowed by the Commissioners for General Purposes. The matter was taken to the court at the instance of the revenue. In co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per district he could have obtained accommodation on payment of a much lesser rent and the food and accommodation which he in fact obtained, as a result of the Board's requirements, cost him during the year in question a total sum of pound 55. This was sought to be deducted from his remuneration for the purpose of taxation. Croom-Johnson J., dealing with the plea that the respondent had to work at his room and therefore it was in the performance of his duties that he incurred the expenses, observed thus : " Many of us have to take work home, especially those of us who are young enough to want to get on in the world. But that is not what the rule says. I have been referred by the respondent to one or two cases which I have examined, but they only show this, as it seems to me, that when a taxpayer asks for a deduction within the terms of rule 9 he has to prove what rule 9 says he has to prove and that proof short of that will not do. But I do not want to leave the case quite there on this. I think that the respondent would probably wish that the real point which he made should have something said about it, and his real point was that as he was not free to choose his place of reside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oncerned in that case with a claim for an allowance of pound 350, the rent the respondent had to pay in excess of the allowance given to him by his employer. That was claimed by way of deduction as the company required him to reside in London to carry on his duties satisfactorily and further the respondent had a duty to entertain at his residence customers of his employer who were on a visit to this country. A bedroom was available for customers who wished to sleep at the flat overnight, as it sometimes happened. For these reasons it was contended by the respondent that he was entitled to claim the difference between the allowance that he obtained and the rent that he had to expend as a permissible deduction. Dealing with this, the court said thus: " It has been pointed out many times, and it is unnecessary for me to refer to any of the occasions because it is notorious, that it is very difficult for a taxpayer under Schedule E to bring his expenses within the Paragraph that I have just read. In order to succeed in a claim under the rule the taxpayer has to prove, first of all, that the expense is one which he was necessarily obliged to incur and, secondly, that it was incurred w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed after the process of performance has commenced is permissible as deduction while in the other, all expenses incidental thereto may also be permitted. True, this may sometimes entail hardship. But, for that reason, it is not for us to enlarge the scope of the provision for deduction so long as the provision is specific enough. If hardship there be any, it is for the legislature to take note of and not for us to remedy. We do not think that even if the assessee was required by his conditions of service to stay at Ernakulam, any expenses incurred by way of payment of rent for the room in which he was staying could be said to be incurred " in the performance of his duties ". In this view, we do not go into the other question, whether, in the case before us, the assessee was required, by the conditions of his service, to spend such amount. In the result, we answer the question referred to us in the affirmative, that is, in favour of the revenue and against the assessee. In the circumstances of the case, we direct the parties to bear their costs. A copy of this judgment under the seal of the High Court and the signature of the Registrar will be sent to the Income-tax Appellate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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