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Issues: (i) Whether incentive bonus was allowable as a deduction at 40% under section 10(14) of the Income-tax Act, 1961 despite the absence of proof of actual expenditure wholly, necessarily and exclusively incurred; (ii) Whether additional conveyance allowance was allowable under section 10(14) of the Income-tax Act, 1961 despite the absence of proof that the amount was actually incurred wholly, necessarily and exclusively for development duties.
Issue (i): Whether incentive bonus was allowable as a deduction at 40% under section 10(14) of the Income-tax Act, 1961 despite the absence of proof of actual expenditure wholly, necessarily and exclusively incurred.
Analysis: The question was covered by an earlier binding decision of the same court, which had held that the claim could not be sustained in the manner pressed by the assessee. The issue was therefore answered in line with that precedent.
Conclusion: The issue was answered in the negative and in favour of the Revenue.
Issue (ii): Whether additional conveyance allowance was allowable under section 10(14) of the Income-tax Act, 1961 despite the absence of proof that the amount was actually incurred wholly, necessarily and exclusively for development duties.
Analysis: The Tribunal had not recorded an independent finding and had proceeded on the same reasoning as on the first question. On the material noted, the allowance had been restricted by the tax authorities on the basis of the certificate produced, and that approach was held to be correct under section 10(14).
Conclusion: The issue was answered in the negative and in favour of the Revenue.
Final Conclusion: Both referred questions were decided against the assessee, and the reference stood disposed of accordingly.
Ratio Decidendi: A claim for allowance under section 10(14) of the Income-tax Act, 1961 must be supported by the statutory requirement governing the allowance, and where the claim is not independently established, the Revenue's determination will prevail.
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