TMI Blog1993 (8) TMI 130X X X X Extracts X X X X X X X X Extracts X X X X ..... riat, the Department of Agriculture, NABARD and Reserve Bank of India to coordinate the activities of the bank in implementing the various policy decisions of the Government. His duties include identifying factors hindering agricultural development in the area of operation of the concerned Agricultural Development Banks, identifying factors to overcome drought situation and boost agricultural activity. In the nature of the duties performed by him he had to tour the State exclusively. However, the bank did not provide him any conveyance. He himself borrowed from the bank and purchased a car which he had been using during the course of discharge of his official duties. He was entitled to reimbursement of 50 litres of petrol bills. He had submitted all petrol bills to the Bank for reimbursement. However, he was reimbursed only to the extent of 50 litres petrol every month. He is not in possession of any petrol bill now nor would it be possible for the bank to produce such petrol bills since there was time gap of more than 5 years by now. 3. For the accounting year relevant to assessment year 1988-89, the assessee submitted income-tax return disclosing only the income noted below : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... FROM OTHER SOURCES : Rs. Rs. Rs. Interest on NSCs 12,570.00 Interest on bank deposits 625.11 Lease charges on car used for official pur- poses only. Amount equivalent to 70 litres of petrol @ Rs. 10 per litre (10 x 70 x 12) 8,400 ------------ 13,195.11 LESS : EXPENSES DEDUCTIBLE UNDER SECTION 57 : 1. Amount spent on 70 litres of petrol per month @ Rs. 10 per litre 8,400 2. Depreciation on motor car @ 20% on Rs. 1,05,831 21,166.20 3. Interest paid on current account 647.10 ----------- 21,813.30 ---------- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It is brought only in the appeal memo just to support the claim of depreciation of Rs. 21,166. The contention of the assessee that deduction should be allowed under section 57(iii) cannot be accepted. Depreciation on car, held the Dy. Commissioner (Appeals), could be allowed only where the assessee was deriving income from either profession or business. The assessee had shown Rs. 8,400 towards hire charges only to claim depreciation. The assessee has already been allowed standard deduction under section 16(i). The claim of the assessee was held not allowable and hence it is dismissed. 5. I have heard Shri V. Padmanabhan, learned counsel for the assessee and Shri C.V. Surya Prakash Rao, the learned departmental representative. Firstly the contention of the assessee was that he had received Rs. 8,400 towards hire charges from the bank. Though it was to be shown under the head other sources in his Income-tax return, by mistake it was not shown like that. That by itself would not disentitle him to claim depreciation. No iota of evidence that the assessee was paid Rs. 8,400 towards hire charges by the bank was there. At least bank certificate to show that so much of hire charges was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g allowance was held to be either part of salary or part of perquisite. The amount reimbursed towards petrol bill charges would be allowable as part of deduction in the hands of the bank, employer of the assessee. At the same time this payment does not secure any benefit or perquisite to the assessee since it is a mere reimbursement of the expenditure. Unless some benefit or perquisite results, it cannot be considered as income of the assessee at all. The real situation when analysed would show that the obligation to pay for petrol bills up to an extent of 50 litres was undertaken by the bank and in fact the petrol was consumed for purpose of the bank during the course of discharge of official duties of the assessee. The tours undertaken by the assessee was on behalf of the bank. Therefore, the liability to incur expenditure on petrol is that of the bank. While reimbursing the petrol bills, the bank was only fulfilling its own obligation to meet such expenditure. I am unable to understand under these circumstances how the reimbursement of petrol bills can be considered to be a perquisite or benefit or advantage to the assessee. If it is not a benefit or perquisite to the assessee, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owed monies and the interest due thereon constitute necessary expenditure for earning the said income and, therefore, it is an obvious case which is liable to be allowed as deduction under section 57(iii) of the Income-tax Act. However, the case on hand is not similar. There is no corresponding income which can be brought to tax under the head other sources. The allegation that the assessee had received Rs. 8,400 towards hire charges was never proved and it is not established as a fact. For that reason, it cannot be considered to be income from other sources. Reimbursement of petrol bills cannot be either income or perquisite. For that reason it cannot be considered as income from other sources. That means there is no income which can be correlated to the use of the car. When there is no income the depreciation on car cannot be allowed under section 57(iii). The second decision relied on by the assessee, namely, Smt. Archana R. Dhanwatay's case cannot also come to the aid of the assessee. The ratio of the decision is that deduction should be allowed from the income from other sources although the assessee had not claimed it. However, unless there is corresponding income or likeliho ..... X X X X Extracts X X X X X X X X Extracts X X X X
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