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TMI Blog2019 (4) TMI 770X X X X Extracts X X X X X X X X Extracts X X X X ..... opening assessment were not valid. Therefore, we do not find any merit in this ground of appeal of the assessee. Accordingly, this ground of appeal of the assessee stand dismissed. Addition on account of Leave Travel Concession claim by the assessee by virtue of sec. 10(5) - HELD THAT:- We find that as per provision of sec. 10(5) of the Act only that reimbursement of travel concession or assistance to an employee is exempted which was incurred for travel of the individual employee or his family members to any place in India and nowhere in this clause it had been stated that even if the employee travel to foreign countries, exemption would be limited to the expenditure incurred to the last destination in India. On identical facts and similar issue in proceedings under section 201(1) &201(IA) of the act the relevant part of the decision of the ITAT Lucknow in the case of the State Bank of India Vs. DCIT(TDS) [2016 (3) TMI 282 - ITAT LUCKNOW] of the view that the said sub-section provides that where an individual had received travel concession or assistance from his employer for proceeding on leave to any place in India, both for himself and his family, then such concession received b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... man and Nicobar is part of India and hence the tour taken by the Appellant be considered as Travel within India. It is therefore submitted that the Hon CIT(A)-4, Vadodara has wrongly confirmed the disallowance made by AO. The Claim being rightly made, the AO be directed to allow the same. 4. The Ld. CIT(A)-4 Vadodara, has erred in confirming the charging of interest under section 234A/B/C/D. It be held so now and same be deleted." 2. The brief fact of the case is that assessee was an employee of Bank of Baroda (Senior Branch Manager) and derived income from salaries. As per the information available with the AO for the Financial Year 2010-11 the assessee has availed LTC which has also covered journey to foreign destinations. The reimbursement of such claim of LTC was not offered for tax by the assessee, therefore, the case of the assessee was reopened after recording reasons thereof and proceedings were initiated under the provision of Sec. 147 of the Act by issuing of notice u/s. 148 of the act on 23.09.2014. The assessee has submitted that he has not claimed any amount towards his foreign travel and his foreign travel does not form part of LTC claim. The AO has not accepted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Rules no disallowance shall be made for his claim of LTC. The AO has not accepted the claim of the assessee. He has referred sec. 10(5) of the I.T. Act and Rule 2B of the I.T. Rule and stated that the claim of exemption is available for performing of LTC to any place in India and not for travelling to foreign destinations. Consequently the AO has disallowed the claim of LTC amounting to ₹ 4,06,452/- as exempt u/s. 10(5) of the Act and added to the total income of the assessee. 4. Aggrieved assessee has filed appeal before the Ld. CIT(A) the Ld. CIT(A) has dismissed the appeal of the assessee. The relevant part of the decision of the CIT(A) is reproduced as under:- "4.3. I have carefully considered the order of the Assessing Officer that "As per the provisions of section 10(5) of the Act only that reimbursement of travel concession or assistance to an employee is exempted which is incurred for travel of the individual employee or his family members to any place in India. It is nowhere stated that even if the employee travels to foreign countries, exemption would be limited to the expenditure incurred to the last destination in India. The said provision was intr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... foreign journey is also irrelevant. The Assessing Officer had only held that amount is not exempt u/s 10(5) of Income Tax ACT, 1961. In view of the above discussion, it is held that the value of LTC received by the appellant is not exempted u/s 10(5) of the Income Tax Act, 1961. 4.7. On identical facts ITAT, Chandigarh vide ITA No.938/Chd/2011 in the case of Shri Om Parkash Gupta VS ITO Wd.4(1),Chandigarh has dismissed the appeal of the assessee rejecting the claim of the assessee of exemption u/s.10(5) of the Act. In view of the above, it is held that the value of LTC received by the appellant is not exempt u/s.10(5) of the income-tax Act, 1961, it is held that the Assessing Officer has rightly made addition u/s.10(5) and Rule 2B of the incometax and the same is upheld. The sole ground of appeal is dismissed. 5. The third ground of the appeal is as under: "3. The learned AO has grossly erred in charging interest u/s 234B and 234C of the Act. It is submitted that the levy of interest is incorrect and same be deleted now. Further the AO has also initiated penalty proceedings u/s 271(l)(c) of the Act which is against the law." 5.1 The Authorized Representative has m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee by virtue of sec. 10(5) of the Act. With the assistance of the Ld. Representative we have perused the material on record. The assessee has stated that as per scheme of the travel journey a complementary journey was awarded to visit a place outside India started from Mumbai and come back to Mumbai. However, no amount has been charged as it was complementary in nature. Hence, it was not form part of LTC claim. We have gone through the application of the assessee for the reimbursement of LTC claim and it is noticed that assessee has performed the journey at the time of LTC as under:- Sr. No. Date of commencement of journey From To Mode Class of Travelling 1. 24.10.2010 Baroda Bombay Flight Economy 2. 25.10.2010 Bombay Calcutta Flight Economy 3. 25.10.2010 Calcutta Port Blair Flight Economy 4. 26.10.2010 Port Blair Calcutta Flight Economy 5. 26.10.2010 Calcutta Bombay Flight Economy 6. 26.10.2010 Mumbai Singapore Flight Economy 7. Singapore Kualalampur Bus 8. 01.11.2010 Kualalumpur Bangkok Flight Economy 9. 05.11.2010 Bangkok Mumbai Flight Economy 10 05.11.2010 Mumbai Baroda Flight Economy We find that as per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tention of the Legislature to allow the employees to travel abroad under the garb of benefit of LTC available by virtue of section 10(5) ) of the Act. Undisputedly, in the instant case the employees of the assessee have travelled outside India in different foreign countries and raised claim of their expenditure incurred therein. No doubt, the assessee may not be aware with the ultimate plan of travel of its employees, but at the time of settlement of the LTC/LFC bills, complete facts are available before the assessee as to where the employees have travelled, for which he has raised the claim; meaning thereby the assessee was aware of the fact that its employees have travelled in foreign countries, for which he is not entitled for exemption under section 10(5) of the Act." We have also gone through the provisions of sec. 10(5) of the Act reproduced as under:- "10. In computing the total income of a previous year of any person, any income falling within any of the following clauses shall not be included- '' [(5) in the case of an individual, the value of any travel concession or assistance received by, or due to, him,- (a) from his employer for himself and his family, in con ..... X X X X Extracts X X X X X X X X Extracts X X X X
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