TMI Blog2016 (5) TMI 693X X X X Extracts X X X X X X X X Extracts X X X X ..... ent is made to meet the expenses incurred and when not taxable under Section 10(14) of the Act merely because the actual expenses were not verified, the character or nature of the payment would not be changed so as to include under Section 17(2) of the Act. On the aspects of verification, the Tribunal has relied upon not only its own decision but has further relied upon the circular issued by the Ministry. No substantial question of law, would arise for consideration, as canvassed - Decided against revenue. - ITA. No. 653/2015 C/W ITA.NOs. 654 AND 655/2015 - - - Dated:- 1-4-2016 - J U D G M E N T All these appeals are preferred by the Revenue by raising following substantial questions of law:- 1.Whether on the facts and in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee and the Assessing Officer thereon; as to the same being reasonable and exempt under Section 10(14) of the Act or liable to deduction of tax under section 192 of the Act have been laid out briefly at paras 2.1 to 2.3 of this order (supra). 4.3.2. We find that the learned CIT (Appeals) s in their impugned orders had considered the decisions of the ITAT, Kolkata Bench in the case of Saptarshi Ghosh (supra) and decision of the Mumbai Bench of the ITAT in the case of Madanlal Mohanlal Narang(supra) wherein it was held that it is not open to Revenue to call for details of expenditure incurred unless the per diem allowance paid is disproportionately high compared to the salary received or with regard to the duties performed by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... curring such expenses. It is found that the Assessing Officer has not gone through the CBDT Circular wherein it is clarified that where specific allowances are reasonable with reference to the nature of the duties performed by the employee and are not disproportionately high compared to the salary received by him, no attempt will ordinarily be made to call for details of expenses actually incurred by him with a view to disentitling him to some extent from the exemption. 3.1 Useful reference could also be made to the following decisions: 1. CIT Vs. L T Ltd (2009)313 ITR 1(SCO 2. CIT Vs. ITI Ltd (2009)221 CTR 1(SC)609 3. CIT Vs. Gostino Mario Others 241 ITR 312(SC) 4. CIT Vs.Micro Land Ltd.(2010)323 ITR 670 (Karn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest under Section 201(1A), amounting to ₹ 12,93,117 relating to default under Section 201(1) rws 192. Since, the assessee has been held to be not in default under section 201(1) with regard to the per diem allowances paid the interest under Section 201(1A) is also held to be not chargeable, and hence deleted 5. As a result, the appeal is allowed. 4.3.3 Before us, except for raising the grounds of appeal and supporting the views of the Assessing Officer, which are not tenable in the light of the judicial pronouncements of the Tribunal and the Circulars of Ministry of External Affairs, Govt. of India referred to above, Revenue has not been able to controvert the findings in the impugned orders of the learned CIT (Appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt which is stated to have been paid as per diem allowance was not highly disproportionate or not unreasonable, the further verification of the actual expenditure is not to be considered. The resultant effect is that the amount is to be treated as by way of reimbursement of expenses. 5. Mr. Aravind, learned counsel appearing for the appellant, raised the contention that as per Section 17(1)(iv) of the Income Tax Act, 1961, ( the Act for short) the amount would fall in the category of perquisites in addition to the salary or wages and therefore, the TDS was deductable. However, when he was confronted with the nature of the amount as to whether such amount is taxable or not, he submitted that as per Section 10(14) if it is by way of reim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clusively incurred in performance of duties, to the extent to which such expenses are actually incurred would fall in the sa id category. It is the case of the assessee that the payment was not made as an allowance on par with the perquisites, but the case of the assessee was that the payment was made to meet the expenses incurred. When the payment is made to meet the expenses incurred and when not taxable under Section 10(14) of the Act merely because the actual expenses were not verified, the character or nature of the payment would not be changed so as to include under Section 17(2) of the Act. On the aspects of verification, the Tribunal has relied upon not only its own decision but has further relied upon the circular issued by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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