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2020 (2) TMI 310 - ITAT KOLKATAComputation of Exemption u/s 10(13A) for House Rent Allowance (HRA) - As per AO ‘performance bonus’ received by the assessee also formed part of ‘salary’ for the purposes of Section 10(13A) and accordingly re-computed the exemption available u/s 10(13A) thereby resulting in disallowance of the entire exemption claim - HELD THAT:- Performance bonus received by the appellant did not form part of ‘salary’ for the purposes of computing exemption u/s 10(13A) of the Act. Decision of the Hon’ble Kerala High Court in the case of CIT Vs B.Ghosal [1980 (2) TMI 57 - KERALA HIGH COURT] is on identical facts wherein on exact same set of facts the Court had held that ‘performance bonus’ does not form part of ‘salary’ as defined in clause (h) of Rule 2A for the purposes of Section 10(13A) of the Income tax Act, 1961. Considering the facts narrated above, we note that total rent paid by the assessee during the year is to the tune of ₹ 8,20,000/-. The basic salary for the purpose of computation of house rent disallowance is ₹ 3,00,000/- (10% of ₹ 30,00,000/- being basic salary). Therefore, excess of rent paid over 10% of salary comes at ₹ 5,20,000/- (₹ 8,20,000/- - ₹ 3,00,000/-). Therefore, assessee is entitled for house rent allowance at ₹ 5,20,000/- u/s 10(13A) of the Act. Assessing Officer is directed to allow the exemption of HRA at ₹ 5,20,000/-. - Decided in favour of assessee
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