9911796707
TMI Blog1989 (4) TMI 60X X X X Extracts X X X X X X X X Extracts X X X X ..... respondents to refrain from adding dearness allowance paid to the members of the union to the salary received by them for the purpose of assessment under the Income-tax Act and for a direction to the Commissioner of Income-tax to refund the income-tax already deducted from their salary on account of the income-tax payable by the members of the union. The stand of the petitioner-Union is that dearness allowance paid or payable to the members of the Union cannot be included in the total income of the assessee members and, therefore, the deduction in that behalf was illegal. The stand of the petitioner is that the dearness allowance is not income and, therefore, it cannot form part of the taxable income because dearness allowance is paid on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e rise in prices or gratis, it is income. That being so, there should be no escape from the situation that it is income liable to taxation under the Income-tax Act. It is, therefore, liable to be added to the total taxable income of an assessee. The income is not taxable as such only if it falls within any of the provisions relating to exemptions. It is not in controversy that there is no exemption in regard to dearness allowance. In that view of the matter, the submission that the dearness allowance is paid only to offset the erosion in wages and, therefore, it is not income, is absolutely fallacious. Wages are raised from time to time primarily to offset the erosion in wages. If the principles enunciated on behalf of the petitioner are to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, and must, therefore, be deemed to be part of the 'salary', unlike travelling allowance, housing allowance, etc., which are meant for particular purposes and are confined to particular occasions, and sometimes to particular areas." The Karnataka High Court gave its decision following a decision of the Madras High Court in V. Srinivasan v. Padmasini Ammal, AIR 1957 Mad 622. We humbly join in the views expressed by their Lordships of the Karnataka High Court. If there was any scope for doubting whether dearness allowance is salary or not, the doubt has clearly been set at rest by Parliament by enacting the Direct Tax Laws (Amendment) Act, 1989, which received the assent of the President on March 15, 1989. It amended section 2(24) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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