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TMI Blog2019 (6) TMI 774X X X X Extracts X X X X X X X X Extracts X X X X ..... ters, filing of the accounts and vouchers/receipts are insisted upon to claim exemption under section 10(14) of the Act by the Income-tax authorities, it will lead to voidable waste of time and expenditure and would serve no useful purpose but on the contrary it would be counter-productive. Exemption claimed by the assessee has to be allowed. - I.T.A.No.13 & 14/Viz/2019, I.T.A.No.16/Viz/2019, I.T.A.No.25/Viz/2019 - - - Dated:- 29-5-2019 - Shri V. Durga Rao, Judicial Member And Shri D.S. Sunder Singh, Accountant Member For the Assessee : Smt.Suman Malik, AR For the Revenue : Shri G.V.N.Hari, AR ORDER PER D.S. SUNDER SINGH, ACCOUNTANT MEMBER : These appeals are filed by the assessees against the orders of the Commissioner of Income Tax (Appeals) [CIT(A)], Rajamahendravaram dated 26.09.2018 and 15.10.2018. Since the facts of the case are identical, these appeals are clubbed, heard together and a common order is being passed for the sake of convenience. 2. All the assessees are development officers in Life Insurance Corporation of India. They have filed the returns of inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled the reply stating that the exemption was claimed u/s 10(14), since, the amounts were wholly and exclusively spent on tour and travelling for mobilizing the business and are exempt under rule 2BB(1)(c) of the I.T.Rules. The AO considered the explanation of the assessee and not being satisfied with the explanation, Thangirala Immanuel, Avadhanula Srinivasa Rao, Nuthalapalli Ravi Shankar, Palakol held that the assessee did not satisfy the following conditions required to be satisfied for allowing exemption u/s 10(14) (i) The amount in question is in nature of a special allowance or benefit (ii) The special allowance or benefit is not in the nature of perquisite within the meaning of section 17(2)] (iii) Such amount is specifically granted to meet expenses wholly, necessarily and exclusively incurred in the performance of duties of an office or employment of profit (iv) Such amount should be specified and notified in the official gazette by the Central Government. 2.2. According to the AO, all the above conditions required to be satisfied cumulatively, to be entitled for exemption u/s 10(14) of the Act and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... incentive bonus, but not the allowances which are incurred for the purpose of carrying out the duties. Therefore, argued that the case law relied upon by the Ld.CIT(A) or AO is not applicable in the assessee s case and the assessee s case is squarely covered for exemption u/s 10(14) r.w.Rule 2BB of I.T.Rules. The assessee also relied on the decision of K.Pullarao Vs. ITO in ITA No.1647/Hyd/1995 dated 31.01.2002, wherein the Tribunal has followed the decision of the Hon ble Jurisdictional High Court in Appeal No.117/1992 and requested to follow the same. 5. On the other hand, the Ld.DR relied on the orders of the lower authorities. 6. We have heard both the parties and perused the material placed on record. On identical facts in the case of Avadhanula Srinivasa Rao, the ITAT allowed the appeal of the assessee following the order of Shri K.Pulla Rao (supra) for the A.Y.2009-10 in ITA no.243/Viz/2017 dated 09.11.2018. Hon ble Jurisdictional High Court in the case law referred in appeal No.117/1992 observed that We approve the reasoning of the Tribunal. In our view where amounts are paid to the employees by an employer to me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against an employee by an employer, the said presumption that the employee has incurred the expenditure for which it is granted, will apply and it will not be necessary for the employees to submit accounts every month to the employer and along with return to the assessing authority. If, in such matters, filing of the accounts and vouchers/receipts are by the Income- tax authori t ies, i t wil l lead to voidable waste of t ime and expendi ture and would serve no useful purpose but on the contrary i t would be counter -product ive . The coordinate bench of the tribunal in the case of K. Pul larao (supra) has considered the rat io laid down by the decision of the Hon'ble Jurisdict ional High Court and al lowed the deduct ion claimed by the assessee. For the sake of convenience, the relevant port ion of the order of the Hon'ble Jurisdict ional High Court , which is extracted by the ITAT, as under: - We approve the reasoning of the Tribunal. In our view where amounts are paid to the employees by an employer to meet expenses wholly, necessarily and exclusively for the performance of the duties, such amounts can be exempted to the extent it is shown that it has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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