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TMI Blog1988 (3) TMI 28X X X X Extracts X X X X X X X X Extracts X X X X ..... empt under section 10(14) of the Income-tax Act, 1961 ? 2. Whether, on the facts and in the circumstances of the case, the savings of travelling allowance and sitting fees would not constitute income under section 2(24) (iv) of the Income-tax Act, 1961 ?" It would appear that the assessee was a director of about nine companies. In some companies he was nominated by the Andhra Pradesh State Financial Corporation and in some other companies he was a director on his own. The Income-tax Officer found that out of the travelling expenses and other allowances paid by the companies to the assessee whenever he attended meetings, there was a saving. The total extent of such savings was reckoned at Rs. 5,203 (Rs. 5,153 + Rs. 50). The Income-tax Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... velling allowance and other allowances could be assessed under section 10(14) of the Act. The Tribunal took the view that, in the facts and circumstances, it could not be said that the assessee was holding an office of profit and, consequently, there is no conferment of power to tax the unspent allowance granted specifically for a particular purpose. Section 10(14) of the Act provides that any special allowance or benefit specifically granted to meet expenses wholly, necessarily and exclusively incurred in the performance of the duties of an office or employment of profit, to the extent to which such expenses are actually incurred for that purpose, would be exempt. In other words, the extent of expenses not actually incurred for the purpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Section 10(14) does not use the expression "office of profit".. The expression used is "office or employment of profit". The expression "of profit" qualifies only "employment", and, in our opinion, does not qualify "office". It is enough if a person is holding an office and for the purpose of performing the duties associated with his office, he is granted an allowance or benefit specifically to meet the expenses. In the present case, the assessee is a director of nine companies. There is no doubt that being a director is an "office" held by the assessee within the meaning of section 10(14) of the Act. In fact, the Tribunal concedes this in its order for the assessment year 1973-74. What the Tribunal thought was that an assessee should not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is not clear how the surplus of Rs. 5,153 was arrived at. Apparently, the Tribunal was guided by the view taken in connection with the earlier assessment years that the assessee was not holding an office of profit and, therefore, section 10(14) was applicable. Apparently, it escaped the Tribunal's notice that if section 10(14) was not applicable, then the claim for exemption would totally fail and it would not be open to the assessee to claim exemption of the expenditure up to the extent to which it was incurred. The finding that section 10(14) of the Act, in the facts and circumstances, would have no application frustrates the very claim of the assessee for exemption. Unless the claim can be maintained under section 10(14) of the Act, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orities do not involve themselves in these small exercises and show some benevolence in assuming that the entire allowance paid was spent. It is not clear in what circumstances, in the present case, a conclusion was drawn that there was saving-we are not certain whether the saving was declared by the assessee himself or whether the Revenue drew the inference that there was saving from out of the information available regarding the extent of allowance paid to the assessee and the expenditure incurred by the assessee therefrom. We do not think that in a case like this the Revenue should resort to meticulous accounting in order to subject to tax some small surplus left. From what we have stated above, it is clear that we cannot answer questi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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