TMI Blog1963 (9) TMI 64X X X X Extracts X X X X X X X X Extracts X X X X ..... owance and all other allowances) with effect from the date he takes over. Since the assessee was residing and practising in Ahmedabad, he had to undertake journeys from Ahmedabad to Bhavnagar, for giving lectures to students in the college and he used to go once every week so as to be in Bhavnagar on Tuesday and Wednesday. During the year 1957-58, being the previous year for the assessment year 1958-59, the assessee incurred expenses amounting to ₹ 1,434 for travelling between Ahmedabad and Bhavnagar. This amount of ₹ 1,434 was claimed by the assessee either as an exemption under section 4(3)(vi) or as a deduction under section 7(2)(iii) in his assessment for the assessment year 1958-59. The claim was rejected by the revenue authorities and hence the present reference. There were two grounds on which the assessee contended that the amount of ₹ 1,434 representing the expenses incurred by the assessee for travelling between Ahmedabad and Bhavnagar was liable to be excluded from his assessable income. The first ground was founded on section 4(3)(vi) while for the second ground which was urged in the alternative reliance was placed on section 7(2)(iii). In our ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... knew, argued Mr. M.C. Nanavati, that the assessee was practising as a chartered accountant in Ahmedabad and it was for that reason that it was stated that the salary of ₹ 400 would include travelling allowance and all other allowances. This contention of Mr. M.C. Nanavati has, in our opinion, no substance at all, for it is based on a misreading and misconstruction of the notification appointing the assessee to the post of part- time professor of accountancy. It is no doubt true that the notification appointing the assessee to the post stated that the salary would be ₹ 400 including travelling allowance and all other allowance, but all that this provision meant was that the salary was inclusive of all allowances including travelling allowance and that the assessee shall not be entitled to claim any separate travelling allowance or other allowance. No amount was indicated in the notification by way of travelling allowance or by way of any other allowance and by its very nature it could not be, for what was being given to the assessee was a salary of ₹ 400 per month and not any specific amount by way of travelling or other allowance. From this provision in the notif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held the Recordership of Portsmouth. He incurred certain expenses for travelling between London and Portsmouth in order to attend the Quarter Sessions. These expenses were claimed by him as a deduction from the emoluments of his office as Recorder relying on rule 9 of Schedule E of the English Act. This rule was in the following terms: If the holder of an office or employment of profit is necessarily obliged to incur and defray out of the emoluments thereof the expenses of travelling in the performance of the duties of the office or employment, or of keeping and maintaining a horse to enable him to perform the same, or otherwise to expend money wholly, exclusively and necessarily in the performance of the said duties, there may be deducted from the emoluments to be assessed the expenses so necessarily incurred and defrayed. The claim was disallowed by Mr. Justice Rowlatt and, on appeal being taken to the Court of Appeal, it was also disallowed by a majority of the Lord Justices constituting the Court of Appeal. The matter was carried further to the House of Lords and the House of Lords also disallowed the claim. Viscount Cave L.C. observed as follows: Having given th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on by the assessee was based on section 7(2)(iii). We may point out that in so far as any office or employment of profit may be such that its income is assessable under section 7 under the head salary , section 7(2)(iii) is a counterpart of section 4(3)(vi). Where a special allowance is specifically granted to meet expenses wholly and necessarily incurred in the performance of the duties of an office or employment of profit, such allowance, to the extent to which it is actually spent, is covered by section 4(3)(vi). If on the other hand no special allowance is granted but the assessee is required by the conditions of his service to meet such expenses out of his remuneration, the sum so expended is deductible from his assessable income under section 7(2)(iii). But in both cases the expenses must be expenses which are wholly and necessarily incurred in the performance of the duties of the office. Of course in section 7(2)(iii) there is an additional requirement introduced by the word exclusively , but that need not trouble us, for quite irrespective of the question whether this requirement is intended to add anything to what is already covered by the words used or is introduced mer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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