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2010 (2) TMI 668 - AT - Income TaxIncome under head salary or other sources - Regarding taxability of the salary and different allowances under various heads received by the MLAs - Hon’ble High Court of Rajasthan in the case of CIT v. Shiv Charan Mathur (2008 -TMI - 31398 - RAJASTHAN HIGH COURT) has held that the MLA having been elected and not employed under section 15 is not attracted in respect of remuneration received by him and as a necessary corollary, applicability of section 17(2) clause 4 is also ruled out in respect of reimbursement of medical expenses - Therefore, the remunerations received by the MLAs and MPs cannot be taxed under the head ‘income from salary’ but can only be taxed under the head ‘income from other sources Whether the provisions of section 10(14) of the Act can be invoked for other allowances given to the MLAs - The language of section 10(14) would clearly show that any special allowance or benefit specifically granted to meet expenses wholly, necessarily and exclusively incurred in the performance of duties of an office or an employment of profit would be exempt - The expression “of profit” qualifies only “employment” and does not qualify “office - In the case of an MLA, he may not be holding an employment of profit but he is certainly holding an office of MLA and as such whatever allowances or benefit granted to it to meet the particular expenses, he is entitled for exemption upto the applicability of section 10(14) Act to the allowances granted to the assessee-MLAs whether the special allowances or the benefits other than the perquisites, forms part of the total income defined in section 2(24) of the Act - all allowances section 10(14) can be invoked subject to proof of the expenditure to be incurred in respect of that purpose to which the allowances are given, there would be no need to make a necessary amendment time to time in section 10(17) - only those allowances are to be exempted from the total income of the assessees which are specified in these sections or Rule 2BB of the IT Rules - In the result, appeals of the assessees are partly allowed for statistical purposes
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