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TMI Blog2020 (2) TMI 310X X X X Extracts X X X X X X X X Extracts X X X X ..... nds of appeal raised by the assessee are as follows: 1. For that on the facts and in the circumstances of the case, the CIT(A) was unjustified in law and on facts in upholding the order passed by the AO in which benefit of exemption u/s 10(13A) of the Act was erroneously denied. 2. For that on the facts and in the circumstances of the case, the authorities below were unjustified in law in treating the performance bonus received by the appellant to be part of the salary for the purpose of determining qualifying amount in arriving at the exemption allowable u/s 10(13 A) of the Income Tax Act. 3. For that on the facts and in the circumstances of the case, the authorities below ought to have held that for the purpose of computing qualifyi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 10(13A) which clearly stipulates that any commission or bonus linked to the turnover or the performance has to be treated as salary and hence, 'performance bonus' definitely is covered under the term 'salary' as per the meaning assigned to the definition of 'salary' for the purpose of calculating exemption u/s 10(13A). 'Performance bonus' cannot be comprehended as an allowance or perquisite as defined in Rule 2(h) of the Fourth Schedule to be excluded from the purview of 'salary'. Thus, the assessee's total salary for computations for exemptions u/s 10(13A) for the year under assessment comes to Rs. 30,00,000/- plus Rs. 150,00,000/- which is Rs. 180,00,000/- - 10% of which comes to Rs. 18,00,000/-. Since the assessee has paid rent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turnover or the performance has to be treated as salary and hence, performance bonus definitely is covered under the term salary as per the meaning assigned to the definition of salary for the purpose of calculating exemption u/s 10(13A). Performance bonus cannot be comprehended as a perquisite as defined in Rule 2(h) of the Fourth Schedule which could be excluded the purview of salary. Thus, the assessee's total salary for computations for exemptions u/s 10(13A) for the year under assessment was worked as (Rs. 30,00,000/- plus Rs. 150,00,000/-) Rs. 180,00,000/- and 10% of which comes to Rs. 18,00,000/-. As the appellant paid rent of Rs. 8,20,000/- which is much less than amount of Rs. 18,00,000/- hence appellant claim of 10(13A) as denied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exemption claim of Rs. 8,47,742/-.The ld. Counsel submits that the findings of the AO are contrary to the extant provisions contained in Rule 2A of the I.T. Rules, 1962. Clause (h) of Rule 2A specifically provides that 'salary' includes dearness allowance, if the terms of employment so provede, but excludes all other allowances and perquisites. Accordingly, the performance bonus received by the appellant did not form part of 'salary' for the purposes of computing exemption u/s 10(13A) of the Act. We note that the decision of the Hon'ble Kerala High Court in the case of CIT Vs B.Ghosal (125 ITR 444) is on identical facts wherein on exact same set of facts the Court had held that 'performance bonus' does not form part of 'salary' as defined ..... X X X X Extracts X X X X X X X X Extracts X X X X
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