TMI Blog2013 (9) TMI 683X X X X Extracts X X X X X X X X Extracts X X X X ..... ance allowances incurred in the performance of duty as Development Officers for generating the business being a permissible deduction as the same is exigible to tax. The members of the petitioner's association being salaried persons on furnishing their return of income return be assessed by the assessing authority and it is only after due assessment he entitled for refund of the amount, if any, deducted by the employers conveyance allowance – Writ petition dismissed. - Misc. Bench No. - 2197 of 2004 - - - Dated:- 12-9-2013 - Hon'ble Rajiv Sharma And Hon'ble Dr. Satish Chandra,JJ. For the Petitioner : Prashant Chandra, Prashant Kumar,Shishir Jain, Talha A. Rahman For the Respondent : D. D Chopra, P. K. Khare ORDER (Deliver by Hon. Dr. Satish Chandra, J) By this petition, the petitioners have assailed the communication dated 07.04.2004 issued by the Senior Divisional Manager of Life Insurance Corporation of India (in short LIC) (Annexure No.1), where a direction was issued to deduct the Tax at Source (in short TDS) on conveyance/additional conveyance allowance to be paid to the Field Officers. Sri Prashant Chandra, Senior Counsel, assisted by Sri Shishir Jain, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uage of the taxing statute and if as per the words used in Explanation (baa) to Section 80-HHC read with the words used in clauses (iii-d) and (iii-e) of Section 28, the assessee was entitled to a deduction under Section 80-HHC on export profits, the benefit of such deduction cannot be denied to the assessee." Learned counsel in support of his arguments, also relied on the ratio laid down in the following cases:- 1. Vodafone International Holdings BV Vs. Union of India, 2012 (6) SCC 613; 2. State of Himachal Pradesh others Vs. Himachal Pradesh Nizi Vyavsayak Parikshan Kendra Sangh, (2011) 6 SCC 597; 3. CST Vs. Sanjiv Babrics, (2010) 9 SCC 630; and 4. Judgment order dated 09.02.2007 passed in SLP ( C ) Nos.25058-59/2005 It is also a submission of learned counsel that the issue is squarely covered by the decision of the Hon'ble High Court, Rajasthan in the case of LIC of India Vs. Union of India, decided on 22.01.2003, which was upheld by the Hon'ble Apex Court vide order dated 09.02.2007, (copy on record) while dismissing SLP filed by the Department. In the said case, it was observed that:- "It is, thus, clear that the Development Officers of the LIC are full time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... From a bare perusal of the circular dated 24.04.2004 (Annexure 8 to the writ petition), it is clear that Additional Conveyance Allowance is nothing but additional remuneration being paid to the Development Officers pertaining to their performance. There is no element of reimbursement. The Assessing Officer has rightly asked the proof of having incurred the expenditure, but the same was never produced by the Development Officers. In support his argument, learned counsel relied on the ratio laid down by the Hon'ble Karnataka High Court in the case of Commissioner of Income Tax Vs. M.D. Patil, [1998] 229 ITR 71, where it was observed that "incentive bonus" being linked to the quantum of business procured by the Development Officer amounts to salary which is taxable as such, and the same does not amount to allowance. It was observed by the Hon'ble Karnataka High Court that:- "Therefore, in our considered opinion, incentive bonus/ commission, is a production/business-oriented payment/income and it is not an allowance granted to meet any expense incurred by the Development Officer in the performance of his duties in that capacity. This inference of ours stands substantiated by the ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... curred thereon. The employer shall give a certificate to this effect that the expenditure was incurred wholly and exclusively for the purpose of the official duty. It may be mentioned that "Perquisite" is excluded from the purview of Section 10(14). 'Perquisite' is defined under Section 17(2) of the Act. Explanation 3 under Section 17(2) clearly provides that : "Salary includes the pay, allowance, bonus or commission payable monthly or otherwise or any monetary payment, by whatever name called, from one or more employers, as the case may be,..." In view of above, conveyance/additional conveyance allowance is covered by the word "perquisite" and the same is taxable. Compartmentalization of income under various heads and computation of the taxable portion strictly in accordance with the formula of deductions, rebates and allowances are to be done only as per the scheme provided under the Act. As held by the Hon'ble Apex Court in Karamchari Union, Agra vs. Union of India Ors., (2000) 3 SCC 335, the Income-tax Act, 1961 is a self contained code and taxability of the receipt of any amount or allowance has to be determined on the basis of the meaning given to the words or phras ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
