TMI Blog1984 (11) TMI 169X X X X Extracts X X X X X X X X Extracts X X X X ..... e allowance to meet the expenses wholly, necessarily and exclusively incurred in the performance of the duties of his office and, therefore, the same is exempt from tax under s. 10(14). In the statement of income filed alongwith the return of income, the assessee had, besides claiming exemption in respect of conveyance allowance under s. 10(14) referred to above, also claimed deduction in respect of expenses amounting to Rs. 19,648 incurred on sales promotion, maintenance of office etc., and depreciation amounting to Rs. 16,711 on motor car and furniture making up a total sum of Rs. 36,359 from incentive bonus of Rs. 43,150 and showed a net income of Rs. 6,791 as income from profession. It may be mentioned, that the assessee had treated the incentive bonus received by him as income the above expenditure as a deduction from the gross amount. The ITO did not agree with the assessee regarding the deduction claimed from incentive bonus. He held, that the incentive bonus was nothing but part of salary for services rendered to the LIC as the payment was made on the basis of a percentage as per cl. (5) of the incentive bonus scheme and, therefore, there was no question of allowing any ded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss, were deductible in ascertaining the income under this head. He drew our attention to the expenditure incurred by the assessee in this behalf under various heads like, rent, sales promotion, telephones, repairs, travelling, salary to staff, miscellaneous, etc., amounting in all to Rs. 19,648 and also deprecation amounting to Rs. 16,711 on motor car and furniture. He submitted that the Development Officer had necessarily to maintain the office and incur various expenses which are not separately reimbursed by the LIC, and, therefore, the expenses incurred in this behalf necessarily go to reduce the incentive bonus received from the LIC. He distinguished the decision of the Supreme Court in (1979) 8 CTR (SC) 371 : (1979) 117 ITR 1 (SC) stating, that, that decision had absolutely no application to the facts of this case, as it was with reference to a totally different set of facts and circumstances. He submitted, that, in that case, the question was whether the ITO was justified in disallowing from out of contribution to the recognised provident fund, proportionate amount pertaining to commission paid to the salesman on the ground, that, salary within the meaning of r. 2(h) of Part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purpose of profession. Since there was no challenge to the findings of the AAC in this behalf, the claim for deduction of 40 per cent was held to be reasonable and fair. Shri Dewani contended, that the facts of this case are absolutely identical and on all fours with those of the instant case, and, therefore, this decision is binding on the Tribunal in the light of the dictum laid down by the Madras High Court in CIT vs. L. G. Ramamurthi Ors. 1977 CTR (Mad) 416 : (1977) 110 ITR 453 (Mad), that, no Tribunal of fact has any right or jurisdiction to come to a conclusion entirely contrary to the one reached by another Bench of the same Tribunal on the same facts. In that case, it was further held by the High Court, that, if a Bench of the Tribunal on identical facts is allowed to come to a conclusion directly opposed to the conclusion reached by another Bench of the Tribunal on an earlier occasion, that would be destructive of the institutional integrity itself. He, therefore, submitted, that in the instant case, the facts being identical, the decision of the Tribunal is binding on this Bench. K. Rami Reddy vs. ITO (1984) 8 ITD 633 (Hyd): In this case the assessee was a Devel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 83 wherein the Bench had upheld the claim for deduction of 40 per cent of expenditure out of incentive bonus was also brought to our notice. It was, therefore, submitted finally by Shri Dewani that, incentive bonus was essentially for extra word done by the Development Officer outside the contract of employment and, therefore, the nature of receipt being different from salary, deduction for expenses incurred in connection with the same should be allowed. in this connection, our attention was also invited to the Circular of the Board F. No. 14/9/65-II (A-I) dt. 22nd Sept., 1965 wherein, it has been directed, that an ad hoc deduction for expenses at 40 per cent of the first year s commission and 15 per cent of renewal commission should be allowed as deduction from commission earned by insurance agents. Where separate figures are not available, the same circular directs that such ad hoc deduction should be restricted to 25 per cent of the total commission. Other contentions relating to depreciation and interest were stated to be consequential. 5. As regards the claim for exemption of conveyance allowance under s. 10(24), Shri Dewani invited our attention to the certificate issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e nature of work done under the contract of employment. Though in so many words a reference has not been made to the contract of employment in the earlier decisions of the Tribunal, the purport of the discussion in the orders clearly indicates, that all aspects of the matter had been considered by the earlier Benches before coming to the conclusion, that, deduction introspect of expenses is admissible from incentive bonus. In fact, an identical question had come up before the ITAT, Chandigarh Bench in ITO vs. Raj Kumar Sethi and it was held categorically, that the incentive bonus was a recompense for efforts put in by the assessee beyond the call of duty and for securing business and the same was income from profession eligible for deduction of proven expenditure. Of course in that case, the deduction was restricted to 40 per cent of the bonus in the absence of full details of the claim. In fact, this is a direct decision on the subject which we can ill-afford to ignore. This Bench of the Tribunal has also had occasion to consider a similar question and allowed deduction to the extent of 40 per cent from incentive bonus. The Department officers themselves have allowed the deduction ..... X X X X Extracts X X X X X X X X Extracts X X X X
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