9911796707
TMI Blog2000 (4) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... rbear the respondents and other assessing authorities under the Income-tax Act from levying, assessing and demanding income-tax from the members of the petitioner-association in respect of additional conveyance allowance. The officers of the Life Insurance Corporation of India are paid additional conveyance allowance as part of their remuneration. According to the petitioners, this allowance is specifically granted to meet the expenses wholly, necessarily and exclusively incurred in the performance of the duties. On the basis of the demands made and after prescribing certain norms the eligibility, additional conveyance allowance was granted. On the basis of the advice given and their belief that it is not liable to be included as part of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... total income. Under section 10, income falling under the clauses set out thereunder shall not be included in computing the total income of the previous year. Clause (14) deals with special allowance. The said provision was amended by the Direct Tax Laws (Amendment) Act, 1987, with effect from April 1, 1989. There was a further amendment by the Finance Act of 1995 with effect from July 1, 1995, which substituted the words : "as may be prescribed" for the expression "as the Central Government may, by notification in the Official Gazette, specify". Pursuant to the aforesaid provision, rule 2BB of the Income-tax Rules was inserted by the Income-tax (Eighth Amendment) Rules, 1995, with effect from July 1, 1995. The relevant portion in so far ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TR 514 (Mad) referred to earlier covers the field and that the additional conveyance allowance shall qualify for deduction only when there is a reimbursement. In so far as the first point is concerned, the Division Bench did not consider the prescribed rule 2BB. The Division Bench was dealing with section 10(14) and noted the argument on behalf of the Department that to enable the assessee to take advantage of section 10(14) of the Act, there must be a notification by the Central Government specifying the extent to which the expenses are allowable. The Division Bench observed as follows : "Till now, no such notification was issued by the Central Government and, therefore, deduction under section 10(14) of the Act cannot be claimed." In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly incurred or to be incurred in the performance of duties of an office. The assessee must satisfy two tests namely, that they are expenses of which it can be said at the least that they are wholly and necessarily incurred in the performance of the duties of the office and, secondly, the expenses were also expenses which the assessee is required, by the conditions of his service to incur out of his remuneration. Therefore, when such of these allowances or benefits which are considered to be exclusively incurred in the performance of duties of an office has been prescribed, then the Income-tax Department is bound by the law as prescribed. It is not open to the Department not to take into account rule 2BB(1)(c) in considering the additional ..... X X X X Extracts X X X X X X X X Extracts X X X X
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