TMI Blog2004 (8) TMI 70X X X X Extracts X X X X X X X X Extracts X X X X ..... exemption by the individual assessee at the time of completion of the assessment and he would be entitled to exemption to the extent he is able to establish that a particular amount was wholly, necessarily and exclusively spent by him in the performance of duties of his office - We dismiss this writ petition without prejudice to the right of the individual assessee to raise his claim for exemption before the appropriate Assessing Officer at the time of assessment relating to his income - - - - - Dated:- 3-8-2004 - Judge(s) : P. K. BALASUBRAMANYAN., TAPAN SEN. JUDGMENT The judgment of the court was delivered by P.K. Balasubramanyan C.J.- This writ petition is filed by the National Federation of Insurance Field Workers of India (Jam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sistant Commissioner of Income-tax, TDS Circle, Jamshedpur, called upon the concerned branch managers to deduct tax at source in respect of the conveyance allowance and the additional conveyance allowance paid to the Development Officers as enjoined by section 192 of the Income-tax Act. According to the petitioner, the conveyance allowance and the additional conveyance allowance are not taxable as salary income, since in terms of section 10(14) of the Income-tax Act, the said allowances are not liable to be included in computing the total income of a previous year of any person and consequently, the tax on those amounts could not be deducted by the employer, the Life Insurance Corporation of India, in terms of section 192 of the Act. Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om out of the conveyance allowance and the additional conveyance allowance paid by it to its Development Officers. According to counsel, the Department was bound by that decision irrespective of the limits on its territorial operation and it was bound to follow that decision in the entire Union so long as the same was not upset by the Supreme Court. Alternatively, learned counsel submitted that the said decision laid down the correct law and it will be proper for this court to follow the ratio of that decision and to uphold the plea of the petitioner. On examining the decision of the Rajasthan High Court in Life Insurance Corporation of India v. Union of India [2003] 260 ITR 41, referred to above, we find that the writ petition before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Development Officers as conveyance allowance/additional conveyance allowance. It is asserted in the writ petition that the conveyance allowance and additional conveyance allowance are paid to the Development Officers by the Life Insurance Corporation of India for meeting the actual expenses incurred by them in discharge of their field duties and thus wholly, necessarily and exclusively for meeting such expenditure. But it is seen from annexure 1 and annexure 1/1 communications relied on by the petitioner itself that what is ultimately liable to be exempted under section 10(14) of the Income-tax Act is a matter of assessment and it is not an automatic exemption from the liability to tax under the Act. So long as it is a matter of assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ofit, to the extent to which such expenses are actually incurred for that purpose. Thus, what is the amount of conveyance allowance and the additional allowance that can be claimed to be exempted under section 10(14) of the Act would depend upon the assessee establishing the actual amount spent by him wholly, necessarily and exclusively in the performance of his duties. In J.G. Mankad v. CIT [1965] 55 ITR 448 (Guj), a Division Bench of the Gujarat High Court held that in order to make the deductions under section 7(2)(iii) of the Indian Income-tax Act, 1922, the expenses must be wholly and necessarily incurred in the performance of the duties of the office. The expenses must also be expenses, which the assessee is required by the conditions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we find that this is not a fit case where in exercise of our jurisdiction under article 226 of the Constitution of India, we could or we should give a blanket declaration that the Life Insurance Corporation of India is not bound to deduct tax at source on the amount of conveyance allowance and additional conveyance allowance paid to the Development Officers of the Corporation. The exemption from taxation of those amounts would depend upon the facts to be established by the assessee supported by the necessary evidence at the time of assessment and the exemption will be on the basis of actual expenditure incurred by him as warranted by section 10(14) of the Act. Therefore, in our view, the Income-tax Officer concerned was fully justified in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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