TMI Blog1984 (1) TMI 108X X X X Extracts X X X X X X X X Extracts X X X X ..... he salary certificates for the said financial year granted to the assessee, it was seen that the total amount of salaries included fixed monthly conveyance allowance aggregating to Rs. 3,028 and additional conveyance allowance of Rs. 8,546.35. The assessee claimed exemption in respect of both the fixed monthly conveyance allowance as well as the additional conveyance allowance. The employer treated the fixed monthly conveyance allowance of Rs. 3,028 as exempt from tax under section 10(14) of the Income-tax Act, 1961 ('the Act'). But the additional conveyance allowance amounting to Rs. 8,546 was subjected to tax. The claim for exemption of the additional conveyance allowance was also rejected by the ITO. In an appeal the AAC was of the opini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he performance or his duties and that the amount given to him as additional conveyance allowance was in fact wholly, necessarily and exclusively incurred in performance of such duties. 4. On behalf of the assessee it was urged that the term 'annual remuneration' does not include additional conveyance allowance as per clause 1(a) of the Annexure to the Notification, dated 19-12-1978, of the Ministry of Finance, Department of Economic Affairs. The definition of annual remuneration in the said paragraph was in connection with alteration of remuneration and other terms and conditions of service of the employees of the LIC. This definition cannot control the concept of income under the Act. The nature of the additional conveyance allowance gra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s clause (iii) is as follows : Category " (iii) (a) Development officers working at Conveyance allowance other places and having no touring Per month Rs. 254,10 " duties, and (b) Development officers having touring duties. From these sub-clauses (a) and (b) it is seen that development officers having no touring duties get conveyance allowance at the same rate as development officers having touring duties, From clauses (ii), (iii) and (iv) of sub-paragraph B of paragraph 2 of the said circular it is also found that development officers with or without touring duties get conveyance allowance at equal rates. So, it is amply clear that at least in towns having a population of less than 1 lakh, the development officers get conveyanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Rs. 1,00,000 5 per cent of 4.5 per cent FYSPI of FYSPI (iv) Rs. 1,00,001 to Rs. 1,50,000 Rs. 5,000 plus Rs. 4,500 4.5 per cent plus 4 per of FYSPI in cent of excess of Rs. FYSPI in 1,00,000 excess of Rs. 1,00,000 (v) Rs. 1,50,001 and over Rs. 7,250 plus Rs. 6,500 4 per cent of plus 3.5 FYSPI in ex- per cent of cess of Rs. FYSPI in,50,000 excess of Rs. 1,50,000 (Note : FYSPI means First Year Scheduled Premium Income). --------------------------------------------------------------------------------------------------------------------------------------------------- 8. From this paragraph also it is quite clear that development officers having touring duties get conveyance allowance at a lesser rate than development officers havin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Rs. 8,546 granted to the assessee was wholly and exclusively incurred by him to meet travelling expenses in performance of his duties as a development officer. It is sufficient to indicate that we do not agree with the observation of the AAC in paragraph 8 of his order. In view of his finding it was not necessary for the ITO to determine whether the assessee actually spent the entire amount in performance of his official duties and as such his omission to discuss this aspect could not be relied upon by the AAC in deleting the addition made by the ITO. 10. On a careful consideration of the facts and circumstances of the case and materials on record, we are of the opinion that the ITO was correct in making the addition of Rs. 8,546 and t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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