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TMI Blog2018 (4) TMI 1610X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee did not press these grounds hence they are rejected. 5. Ground No. 2 sub ground-A in A.Y. 2010-11 is common with sub ground A of ground No. 1 in A.Y. 2011-12. 6. The grievance of the assessee in these grounds are that Ld. CIT(A) has erred in confirming the disallowance of 20% of the convenience expenses. The Ld. counsel for the assessee did not press these grounds of appeal hence they are rejected. 7. In the next fold of grievance, assessee pleaded that Ld. CIT(A) has erred in confirming the disallowance of Rs. 1,56,000/-, 2,07,381/- and 45,330/- out of allowance procuring the business in A.Y. 2010-11, 2011-12 & 2012-13 respectively. Before adverting to the specific grievances let us take note of the brief facts of case. The facts on vital points are common, therefore, for the facility of reference, we take facts from A.Y. 2010-11. The assessee at the relevant time was working as a development officer with the LIC of India. He has filed his return of income for A.Y. 2010-11 on 24.03.2011 declaring total income of Rs. 14,35,240/-. This return was processed u/s. 143(1) thereafter Ld. Assessing Officer has recorded reasons and reopened the assessment. The Assessing Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee is that LIC has formulated scheme whereby certain development officers were considered as eligible to as a Senior Business Associate the Senior Business Associate were required to maintain the office at their premises and LIC would reimbursed the expenditure. The scheme has been reproduced by the assessee in the statements of facts filed before us. It has been taken note by the Ld. CIT(A) while taking cognizance of the assesee's written submission. The scheme submitted in A.Y. 2010-11 in the statements of facts read as under:- Similarly During the accounting period there was senior business associates schemes as under. Eligibility Criteria: A Development Officer will be considered eligible to 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 A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Surat, Vadodara, Varanasi, Vishakhapatnam (including Gajuwaka). All Other Places. Chennai Mumbai -including areas comparising within the limits of mumbai Muncipal Corporation (Greater Mumbai), Dombivlli, Kalyan, Thane, Bhawandi, Uthasnagar Bassein Muncipalities and Navi Mumbai New Delhi-Faridabad, Ghaziabad, gurgaon, 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 submissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue 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 the strength of above scheme it was contended that an assessee has received incentive bonus of Rs. 15,55,000/- and 10% of such bonus ought to be considered as reimbursement of the expenditure incurred by the assessee for procuring the business in the capacity of a Senior Business Associate. The Assessing Officer observed that the additional incentive bonus received by the assessee would be treated as a salary income and ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 Rs. 45,000/- out of SBA allowance and development allowance of Rs. 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 procuring the business but he cannot be treated as doing any business. Therefore grounds of appeal are rejected. 14. The next common ground in all these appeals in all the three years relates to determination of annual letting value of the house property. The Assessing Officer has determined annual letting value of the house property at Rs. 48,000 and 60000 in A.Y. 2010-11 to 2012- 13 respectively. 15. Ld. counsel for the assessee at the outset contended that this issue was co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; 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 order passed in A.Y. 2008-09. 18. In the next fold of grievance assessee has pleaded that Ld. CIT(A) has erred in not directing the Assessing Officer to allow interest expenditure of Rs. 5,878/- and Rs. 2,784/- against house property income. Since this issue has not been separately discussed by the Assessing Officer in A.Y. 2010-11, we have remitted the issue with regard to determine of ALV in all these years. Therefore we set aside this issue to the file of Ld. Assessing Officer. The Ld. Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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