TMI Blog2020 (2) TMI 310X X X X Extracts X X X X X X X X Extracts X X X X ..... d held that performance bonus does not form part of salary as defined in clause (h) of Rule 2A for the purposes of Section 10(13A) of the Income tax Act, 1961. Considering the facts narrated above, we note that total rent paid by the assessee during the year is to the tune of ₹ 8,20,000/-. The basic salary for the purpose of computation of house rent disallowance is ₹ 3,00,000/- (10% of ₹ 30,00,000/- being basic salary). Therefore, excess of rent paid over 10% of salary comes at ₹ 5,20,000/- (₹ 8,20,000/- - ₹ 3,00,000/-). Therefore, assessee is entitled for house rent allowance at ₹ 5,20,000/- u/s 10(13A) of the Act. Assessing Officer is directed to allow the exemption of HRA at ₹ 5,20, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceived by the appellant as performance bonus did not partake character of the salary. 4. For that on the facts and in the circumstances of the case, the AO be directed to compute and allow the exemption u/s 10(13A) in respect of HRA received treating the performance bonus received being not salary. 5. For that the appellant craves leave to submit additional grounds and/or amend or alter the grounds already taken either at the time of hearing of the appeal or before. 3. Brief facts qua the issue are that during the assessment proceedings, the assessee has submitted Form 16 before Assessing Officer wherefrom Assessing Officer noticed that assessee has claimed exemption u/s 10(13A) for House Rent Allowance of ₹ 8,47,7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid rent of ₹ 8,20,000/- which is much less than this amount of ₹ 18,00,000/- the assessee is not entitled to any benefit u/s 10(13A) of the Act. Thus, Assessing Officer denied the benefit u/s 10(13A) of the Act. 4. Aggrieved by the order of the Assessing Officer, the assessee carried the matter in appeal before the ld. CIT(A) who has confirmed the order passed by the Assessing Officer. 5. Aggrieved the assessee is in appeal before us. 6. The ld. Counsel for the assessee relied on the submissions made before the authorities below and on the other hand , the ld. DR has primarily reiterated the stand taken by the Assessing Officer which we have already noted in our earlier para and the same is not being repeate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt of ₹ 18,00,000/- hence appellant claim of 10(13A) as denied by the Assessing Officer. 8. On the contrary, the appellant submitted before Assessing Officer that ₹ 150,00,000/- was paid during the financial year as the performance bonus which could not to be considered as part of salary within the meaning of 4th Schedule of I. T. Act. The appellant also relied over the decision of the Kerala High Court in the case of CIT vs. B. Ghoshal 125 ITR 744 wherein it is held that the bonus received by the assessee did not pertake character of salary. We note that the dispute in the assessee s case under consideration in only on the meaning of salary . The assessee is a salaried individual. He had filed the return of income for A. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of facts the Court had held that performance bonus does not form part of salary as defined in clause (h) of Rule 2A for the purposes of Section 10(13A) of the Income tax Act, 1961. Considering the facts narrated above, we note that total rent paid by the assessee during the year is to the tune of ₹ 8,20,000/-. The basic salary for the purpose of computation of house rent disallowance is ₹ 3,00,000/- (10% of ₹ 30,00,000/- being basic salary). Therefore, excess of rent paid over 10% of salary comes at ₹ 5,20,000/- (₹ 8,20,000/- - ₹ 3,00,000/-). Therefore, assessee is entitled for house rent allowance at ₹ 5,20,000/- u/s 10(13A) of the Act. Assessing Officer is directed to allow the exemption ..... X X X X Extracts X X X X X X X X Extracts X X X X
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