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2021 (8) TMI 1053 - ORISSA HIGH COURTTDS Liability payment made by the LIC to its development officers? - Exempted Allowances u/s 10(14) - Salary - Order u/s 201 - ITO (TDS) held that in respect of 12 development officers of LIC there was a short deduction and non-deduction of the tax in the sum for the Financial Year 1999-2000 and that the said amount had to be paid by LIC to the Central Government - HELD THAT:- After the aforesaid amendment to Section 10 (14) of the Act, the legal position, as explained in the CBDT circulars issued thereafter, is that the expenditure reimbursed by LIC would qualify for deduction under Section 10 (14) of the Act. If the expenditure is incurred by the Development Officer, he cannot claim deduction u/s 10 (14) of the Act. It appears that LIC devised a proforma for the development officer to fill up certifying the expenditure incurred by them for development of insurance business. A portion of the allowance thus granted was then treated as exempt under Section 10 (14) of the act. Way back on March 12th, 1997 the CBDT informed the Chairman LIC that such procedure was not in accordance with Section 10 (14) of the Act read with Rule 2 BB (i) of the IT Rules and that “unless an allowance is notified u/s 10 (14) (i) of the Act no portion of it can qualify for tax exemption.” The Court finds no ground made out for interference with the impugned orders of the ITO and the Commissioner.
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