TMI Blog1995 (3) TMI 85X X X X Extracts X X X X X X X X Extracts X X X X ..... nder that provision ? (2) Whether, on the facts and in the circumstances of the case, the finding of the Income-tax Appellate Tribunal that the incentive bonus included an allowance either to the extent proved or reasonably at 40 per cent. of the incentive bonus, which is exempt under section 10(14), is based on any material available on record ? " To answer the above questions, it may be useful to refer to the facts in one of the cases. We propose to refer to the facts as stated in the statement of case in Revision Case No. 30 of 1991. The assessee was the Development Officer in the Life Insurance Corporation of India, Cuddapah. For the assessment year 1983-84, he returned an income of Rs. 29,070 and also disclosed that he received " i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsel appearing for the assessees in the abovesaid revision cases, supported the order of the Tribunal on various grounds. It was contended that the incentive bonus did not form part of " salary ", therefore, it could not be included as receipt under the head " Salary " and that it should be treated as income from other sources and accordingly the net income after excluding necessary expenses should be taken as taxable income. They further submitted that even if it is treated as " salary ", the expression " salary " should be so construed as to bring in its net salary after excluding expenses incurred in earning the salary and that would be the real income. It was also contended that even though there was no provision in the Income-tax Act f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the only deductions permissible in law are those specified in section 16 of the Act. In M. Krishna Murthy v. CIT [1985] 152 ITR 163 (AP), one of the questions which fell for consideration of the Division Bench of this court, was whether the incentive bonus paid to the employees of the A. P. State Electricity Board, which was initially paid to these employees in the Thermal Station at Vijayawada but was later extended to the other employees of the Board, would fall within the meaning of " perquisite ". The Division Bench observed that the payment under the head " Incentive bonus " had the character of additional remuneration for services rendered by the employees for exerting more strain to maximise generation of electricity and did fall w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssioner of Income tax as well as by the Commissioner of Income-tax in revision. Challenging the correctness of the order of the Commissioner of Income-tax, the assessee filed the writ petition. The Division Bench which dealt with the writ petition, referred to the judgment in M. Krishna Murthy's case [1985] 152 ITR 163 (AP) and held that " incentive bonus " would fall within the meaning of " salary ". Sri Y. Ratnakar, learned counsel appearing for the assessees in some of the batch cases, pointed out the fact that the Division Bench referred to the definition of " wages " under the Payment of Wages Act, 1936, to come to the conclusion that " bonus " was included within the meaning of " wages " and argued that the Payment of Wages Act had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der section 10(14) of the Act. The said provision, in so far as it is relevant for our purpose, reads as follows : " 10. (14)(i) any such special allowance or benefit, not being in the nature of a perquisite within the meaning of clause (2) of section 17, specifically granted to meet expenses wholly, necessarily and exclusively incurred in the performance of the duties of an office or employment of profit, as the Central Government may, by notification in the Official Gazette, specify, to the extent to which such expenses are actually incurred for that purpose ; (ii) any such allowance granted to the assessee either to meet his personal expenses at the place where the duties of his office or employment of profit are ordinarily performed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the incentive bonus is in the nature of a perquisite within the meaning of section 17(2) of the Income-tax Act ; further, to enable the assessee to have the advantage of the said provision there must be a notification by the Central Government specifying the extent to which the expenses are allowable. In the instant case, there is no such notification. For these reasons, in our view, the assessees cannot draw any support from section 10(14) of the Act. No judgment is brought to our notice taking a view contrary to the decision of this court in K. A. Choudary v. CIT [1990] 183 ITR 29, which is binding on us. In our view, that judgment does not require reconsideration. In this view of the matter, we do not consider it necessary to delve ..... X X X X Extracts X X X X X X X X Extracts X X X X
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