9911796707
TMI Blog1972 (9) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... nditions of his service he was forced to stay at Ernakulam, the rent payable was wholly, necessarily and exclusively for such performance. This claim was disallowed by the Income-tax Officer and this was confirmed by the Appellate Assistant Commissioner. In the further appeal to the Appellate Tribunal the same decision was reached. The matter has been taken by way of reference to this Court at the instance of the assessee. According to the assessee he was staying alone at Ernakulam and this stay being necessitated solely by the conditions of his service he was entitled to the deduction claimed. The claim was made in regard to the assessment year 1964-65 and that was disallowed. That was again made in regard to the assessment year 1965-66. That too was similarly disallowed. The reference relates to the assessment year 1965-66. The deduction is claimed by the assessee as admissible under section 16(v) of the Act. That sub-section allows a deduction from the salary of any amount actually expended by the assessee which " by the conditions of his service, he is required to spend out of his remuneration wholly, necessarily and exclusively in the performance of his duties ". Of course, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... " in the performance " is much narrower in its scope than the term " for the purpose of the performance ". Many items of expenditure may be incurred by an assessee to enable him to perform his duties properly. These are not expenses incurred in the performance of the duties as the latter class is limited to those expenses incurred during the process of performance of the duties. The duties may vary depending on the office one holds. The duty, say, in regard to some officers, involve attendance at meetings and conferences and if in regard to such persons expenses are met while attending the meeting or conference and it is wholly, necessarily and exclusively in the performance of their duties, they may be entitled to claim deduction. Similarly, the duties may be one involving travel such as that of travelling salesmen and in such cases expenses incurred in travelling in the course of business is incurred in the performance of duties. This will not be true in the case of a person who incurs expenses for travelling for the purpose of performing his duties, but whose duties do not by themselves involve travelling. This distinction has necessarily to be borne in mind in construing the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ule 9 of Schedule E of the Income-tax Act, 1918, allowed a similar deduction and it was the application of that provision that the High Court was concerned with in the case of Nolder v. Walters. The question for determination in that case was whether a sum of pound 200 claimed by the respondent was an allowable deduction under rule 9 of the Rules in Schedule E of the Income-tax Act, 1918. The said sum of pound 200 included several claims and the claims were allowed by the Commissioners for General Purposes. The matter was taken to the court at the instance of the revenue. In construing the section, Rowlatt J. said thus: " ' In the performance of the duties' means in doing the work of the office, in doing the things which it is his duty to do while doing the work of the office. A man who holds an office or employment has, equally necessarily, to do other things incidentally, and spend money incidentally, because he has the office. He has to get to the place of employment, for one thing. If he had not got the employment he could stay at home. As he has got the employment he has necessarily got to get there, and it costs him something, if it is only shoe leather, to get there ; but t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rld. But that is not what the rule says. I have been referred by the respondent to one or two cases which I have examined, but they only show this, as it seems to me, that when a taxpayer asks for a deduction within the terms of rule 9 he has to prove what rule 9 says he has to prove and that proof short of that will not do. But I do not want to leave the case quite there on this. I think that the respondent would probably wish that the real point which he made should have something said about it, and his real point was that as he was not free to choose his place of residence in a cheaper district than the one that he was in, he found that he had to obtain accommodation on payment of a sum over and above what he would have had to pay if he had been free to choose his place of residence. " Referring to the cases of Nolder v. Walters and Ricketts v. Colquhoun the learned judge held that the rule had to be interpreted according to its strict meaning and, in so interpreting, the appeal by the revenue had to be allowed. In Lomax v. Newton, also a case dealing with the same provision as in the cases already adverted to the question was whether the claim by the respondent for deduction o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en the allowance that he obtained and the rent that he had to expend as a permissible deduction. Dealing with this, the court said thus: " It has been pointed out many times, and it is unnecessary for me to refer to any of the occasions because it is notorious, that it is very difficult for a taxpayer under Schedule E to bring his expenses within the Paragraph that I have just read. In order to succeed in a claim under the rule the taxpayer has to prove, first of all, that the expense is one which he was necessarily obliged to incur and, secondly, that it was incurred wholly, exclusively and necessarily in the performance of his duties. As regards the first of those two requirements, the authorities show that the word 'necessarily' in the expression 'necessarily obliged to incur' refers to the necessities of the office or the employment. In order to qualify, the expense must have been necessitated by the duties of the employment. The fact that it was required by the employer is not sufficient, nor is the fact that it was thought to be necessary by the employee. In this connection, I need only refer to a sentence taken from the judgment of Donovan L.J., in the recent case of Brown ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
