TMI Blog1948 (3) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... dia), Ltd., wrote a letter to the assessee making it clear that out of this commission of 12 per cent., 7 per cent. was to be the representative's own commission and 5 per cent. was to be taken by him as compensation in lieu of the contingency expenses he has to meet with, such as commission to dyeing masters, agents, etc. For the account year relevant to the assessment year 1940-41 the assesses received a sum of ₹ 78,573 which represents this 5 per cent. commission. The Income-tax Officer allowed as an admissible item of expenditure only a sum of ₹ 27,342. This sum was allowed because according to the Income-tax Officer the assessee proved that that amount had actually been spent for that particular purpose, viz., the pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow referred to us by the Tribunal is whether the assessee's claim to exclude from his income the 5 per cent. commission received by him from the Ciba (India), Ltd., can be allowed under Section 4(3)(vi) of the Indian Income-tax Act, without proof by him that the whole commission received by him was spent by him in the performance of his duties as representative of the Ciba (India), Ltd.? It is true indeed that implicit in the question itself is the finding of fact that this allowance was granted to the assessee for the purpose of meeting expenses wholly and necessarily incurred in the performance of the duties of his office. Mr. Joshi has attempted to argue before us that it was open to him to contend that on the facts of this case what ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... performance of the duties of an office or employment of profit. The condition that has got to be satisfied before an assessee can claim exemption under this sub-clause is that the grant that should be made to him must be for the purpose specified in that sub-clause. What is emphasised in this sub-clause is the purpose of the grant, the object with which the grant was made. In my opinion once it is established that the grant was for that particular purpose, it is no longer necessary for the assessee to prove that in fact he expended that grant for the purpose for which it was given. He may spend more or he may spend less, but qua that grant which is given for a particular purpose, he is entitled to the exemption. What is emphasised before u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er to pay the costs. TENDOLKAR, J.-The facts giving rise to this reference have been sufficiently stated in the judgment delivered by the learned Chief Justice and I shall not restate them. The only question that arises for determination on this reference is what is the correct interpretation to be placed on Section 4(3)(vi) of the Indian Income-tax Act. Sub-section (3) of that section provides that certain heads of income shall be excluded from the total income of an assessee. One of such heads is in sub-clause (vi) which is in these terms:- Any special allowance, benefit or perquisite specifically granted to meet expenses wholly and necessarily incurred in the performance of the duties of an office or employment of profit. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erned, it would have been fully covered by Section 10(2)(xv) and the enactment of Section 4(3)(vi) would be entirely redundant in the case of any income derived from business. Similarly, if it was the income of a salaried servant, expenses actually incurred would in all cases have been covered by the first proviso to Section 7 and there would again have been no occasion to enact Section 4(3)(vi) at all. The true interpretation to my mind, therefore, of Section 4(3)(vi) is that where the object or purpose for which the grant is made is to meet expenses wholly and necessarily incurred in the performance of the duties of an office or employment of profit, the whole of that grant must be excluded from the total income of the assessee, and the I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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