TMI Blog1981 (9) TMI 173X X X X Extracts X X X X X X X X Extracts X X X X ..... essee, who is an officer of the Indian Revenue Service, filed his returns of income for the assessment years 1973-74 and 1974-75, showing the city compensatory allowance of Rs. 900 received by him in Part III of the return, as being exempt under section 10(14) of the Act. The ITO completed the assessments under section 143(1) of the Act but, in the process, he treated the city compensatory allowance as part of the assessee's salary for both the years. 3. Instead of seeking a reopening of the assessments under section 143(1), by taking recourse to the provisions of section 143(2A), the assessee filed applications under section 154, claiming that the taxing of the City Compensatory Allowance as salary was a mistake apparent from the record ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claim under section 10(14) was not a mistake apparent from the record, in the light of the Explanation to that section. The assessee, who argued his case before the Tribunal, submitted that, for invoking the ITO's power under section 154 of the Act, he was not relying on the provisions of section 10(14) but was relying on the provisions of section 16(v). The learned Judicial Member, after setting out the provisions of section 16(v), pointed out that the deduction under that section could be claimed only when the amount in question is shown to have been actually expended. Further, in order to succeed in the claim, the assessee had to show that by the conditions of his service, be was required to spend such amount out of the remuneration paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 154. It is now well settled that only a patent error as to fact or as to law, contained in the order of the ITO could be rectified by him under that section. I do not agree with the observations of the learned Accountant Member that the issue involved here is not debatable. City compensatory allowance given to an officer is of the nature of a receipt in his hands. To say that it should be presumed that it is fully expended and expended in the course of the performance of his duties is nothing more than presumption and does not follow directly from the provisions of the statute. There could reasonably be two views as to the deductibility of the city compensatory allowance, since, as stated earlier, it is clearly of the nature of income. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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