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2020 (1) TMI 617 - AT - Income TaxHouse Rent Allowance (HRA) - Computation of salary - Benefit of exemption u/s 10(13A) - authorities below treated the performance bonus received by the appellant to be part of the salary for the purpose of determining qualifying amount in arriving at the exemption allowable u/s 10(13 A) - HELD THAT:- We note that the decision of the Hon'ble Kerala High Court in the case of CIT v. 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/-. Appeal of the assessee is allowed.
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