TMI Blog2018 (4) TMI 1610X X X X Extracts X X X X X X X X Extracts X X X X ..... d these amounts as business income and claimed corresponding deduction in the shape of depreciation etc. - Held that:- Revenue Authorities have rightly treated them as a salary income because assessee was a salaried employee certain expenses could be allowed to him on reimbursement basis if incurred on behalf of the employer for procuring the business but he cannot be treated as doing any business. Therefore grounds of appeal are rejected. Determination of annual letting value of the house property - Held that:- We direct the Assessing Officer to determine the ALV of the house property in these years in accordance with ITAT order passed in A.Y. 2008-09. Whether assessee is entitle to any expenditure under the head business expenses? - Held that:- The assessee separately cannot claim any expenditure under the head business expenditure. In A.Y. 2011-12 & 2012-13, the assessee has not given us the breakup of the expenditure additionally given by LIC to him for earning additional incentive or performing duty as a senior business associate. The scheme considered by us in A.Y. 2010-11 and reproduced above, authorized 10 % of additional convenience allowance or as allowance of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... LIC of India. He has filed his return of income for A.Y. 2010-11 on 24.03.2011 declaring total income of ₹ 14,35,240/-. This return was processed u/s. 143(1) thereafter Ld. Assessing Officer has recorded reasons and reopened the assessment. The Assessing Officer had issued notice u/s. 143(2) along with notices u/s. 142(1) with detail questionnaire. The basic area of dispute between the assessee and the Assessing Officer in A.Y. 2010-11 pertains to claim of following allowances:- Head under which deduction is claimed Amount (Rs.) Fixed Conveyance allowance 42,000/- Allowance for procuring business 1,56,000/- Addl. Conveyance allowance 1,56,000/- Total 3,54,000/- 8. With regard to fixed convenience allowance and additional convenience allowance. Ld. Assessing Officer has observed that assessee is a salaried employee, allowability of claim of deduction is required to be determined on the basis of section 10(14) of the Income tax Act. This section contemplates that certain a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apply as Senior Business Associate if he/she (i) Has completed 5 years service. (ii) Has worked at a cost ratio of 3% or less in the last completed appraisal year. The cost ratio should be reckoned and rounded off to the nearest first decimal place; for example, if the cost ratio works to 3.04%, it should be taken as 3% and if it works to 3.05%, it should be taken as 3.1%. (iii) Is having his/her own office and (iv) Is willing to work as a senior Business Associate. Functions: Besides performing his/her basic duties and obligations as a Development Office, such selected Senior Business Associates shall be authorized to carry out market oriented/customers oriented functions through online portal from his/her Office. Initially, the Senior Business Associate shall be authorized to: 1.Collect Renewal Premiums from all policyholders. 2.Collect Proposal Deposits transaction from agents under his/her organization. 3.Register Proposal of agents working under his/her organization. 4.Submit Proposal of agents working under his/her organization through Electronic Media (E Proposal). The following add on functions will be allowed to a Senior Business As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, Noida. The following benefits will be provided to such Senior Business Associates for marketing and customers related services: 1. One time interest free advance for making alternations in the office infrastructure, renovation, purchase of furniture etc. As shown below: Particulars Category-I Category-II Category-III Maximum amount of Advance (Rs.) 1,50,000 1,25,000 1,00,000 Repayment Term 4 Years ( 48 installments) 4 Years ( 48 installments) 4 Years ( 48 installments) Installment per month (Rs.) 3125 1st- 2565 2nd- to 48th-2605 lst-2240 2nd-to 48th-2080 2. They will be reimbursed an amount as shown below, per month towards office maintenance subject to certain minimum number of renewal premium transactions, proposal Deposits transaction, Registration of proposal and submission of E Proposals. Particulars ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mbursement will allowed to a Senior Business Associate for performing the add-on functions. In the event of a Development Officer joining as a Senior Business Associate in the middle of the month, the reimbursement towards Office maintenance shall be allowed from the first of the following month. However, he/she shall be allowed reimbursement towards various transactions. The Senior Business Associate has to continue to maintain the cost ratio at 3% in the subsequent appraisal years. However, Zonal Manger in-charge can waive the cost ratio up to 1% in that appraisal year in which the cost ratio has exceeded by 3%. Such concession will be allowed on 2 occasion after which no reimbursement shall be allowed towards Office maintenance. However the Senior Business Associate will be allowed additional reimbursement for renewal premium/proposal deposit transaction/submission and registration of E proposal. The reimbursement towards Office maintenance shall continue once the Senior Business Associate maintains the cost ratio at 3% or below. Thus, these receipts were reimbursement of expenses incurred for on behalf of L1C for function which were normally performed by LIC. 10. On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e bonus which has been paid in accordance with scheme. This break up has not been filed in rest of the two years. Therefore we remitted this issue to the file of the Assessing Officer in other two years with a direction that Ld. Assessing Officer shall verify the amount of allowances given to the assessee in the capacity of Senior Business Associate for earning incentive bonus. In other words, the additional allowance for procuring business has to be allowed to the assessee considering as reimbursement of actual expenditure. Ground No B C in A.Y. 2011-12 2012-13 are set aside to the Assessing Officer for re adjudication. 13. Sub ground No. C of ground 1 in A.Y. 2010-11 the assessee has pleaded that Ld. CIT(A) has erred in confirming disallowance of ₹ 45,000/- out of SBA allowance and development allowance of ₹ 26,550/-. The assessee treated these amounts as business income and claimed corresponding deduction in the shape of depreciation etc. The Ld. Revenue Authorities have rightly treated them as a salary income because assessee was a salaried employee certain expenses could be allowed to him on reimbursement basis if incurred on behalf of the employer for procu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as income from salary and added to the total income. Assessing Officer estimated Annual Letting Value (hereinafter Departmental Valuation Officer. Under the provisions of Section 55A, a reference to Valuation Officer can be made for ascertaining the Fair Market Value of a capital asset for the purpose of Chapter IV dealing with determination of income under the head capital gain. In case before us, issue is not of capital gain or fair market value. The determination of annual value has to be done' by concerned Municipal Corporation as envisaged in Circular 204 dated 24.07.1976. CBDT accepted that u/s.23(1)(a) sum for which the property might reasonably be expected to let from year to year is the municipal valuation of the property. Same view has been taken by Hon ble Calcutta High Court in case of CIT vs. Prabhabati Bansali I41 ITR 419 (Cal). In view of this, Officer-is directed to adopt the municipal valuation as ALV for the purpose of tax in question. 3. In the result, the appeal of assessee is allowed. 17. Since there is no disparity on fact, therefore, we direct the Assessing Officer to determine the ALV of the house property in these years in accordance with ITAT or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing any business. He is entitled to the expenses which were reimbursed by the LIC for performing the duty as a Senior Business Associate. The assessee separately cannot claim any expenditure under the head business expenditure. In A.Y. 2011-12 2012-13, the assessee has not given us the breakup of the expenditure additionally given by LIC to him for earning additional incentive or performing duty as a senior business associate. The scheme considered by us in A.Y. 2010-11 and reproduced above, authorized 10 % of additional convenience allowance or as allowance of the incentive bonus for procuring business, this 10% is to be determined on the basis of certificate of LIC giving the breakup of these expenditure. Thus this issue is also set aside to the file of Assessing Officer. Ld. Assessing Officer first determined the expenditure which were to be construed as a reimbursed by the LIC for procuring business in the capacity of a senior business associate and thereafter work out the total amount allowable to the assessee in A.Y. 2011-12 2012-13. These grounds of appeal are allowed for statistical purposes. 21. In the result appeals of the assessee are partly allowed. Order pron ..... X X X X Extracts X X X X X X X X Extracts X X X X
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