Special allowance exemption depends on the purpose of the grant, not proof of actual spending.

A special allowance granted to meet expenses wholly and necessarily incurred in performing official duties is exempt under Section 4(3)(vi) when the statutory purpose of the grant is satisfied. The exemption depends on the object for which the allowance is specifically paid, not on proof that the recipient actually spent the whole amount on those expenses. The provision does not require the assessee to establish corresponding outlay, and such a requirement would add words not found in the text and overlap with other deduction provisions that expressly make actual expenditure relevant.

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Issues: Whether a special allowance granted to meet expenses wholly and necessarily incurred in the performance of the duties of an office or employment of profit is exempt under Section 4(3)(vi) of the Income-tax Act without proof that the assessee actually spent the whole amount for that purpose.

Analysis: The exemption turns on the purpose for which the allowance is granted, not on the subsequent application of the money by the recipient. The language of Section 4(3)(vi) emphasises the grant and the object of the grant. Once it is established that the allowance was specifically granted to meet the relevant expenses, the section does not require the assessee to prove actual expenditure of the entire amount. That interpretation is supported by the contrast between this provision and provisions such as Section 10(2)(xv) and Section 12(2), where actual expenditure is expressly material. Reading into Section 4(3)(vi) a requirement that the allowance must be spent to the extent claimed would add words not found in the text and would make the provision redundant in cases already covered by other deduction provisions.

Conclusion: The assessee was not required to prove actual expenditure of the whole allowance to claim exemption under Section 4(3)(vi); the answer to the reference was in the affirmative and in favour of the assessee.

Final Conclusion: The decision establishes that exemption for a specifically granted allowance depends on the purpose of the grant, not on proof of corresponding actual outlay by the recipient.

Ratio Decidendi: Where a special allowance is specifically granted to meet expenses wholly and necessarily incurred in the performance of official duties, the entire allowance is exempt if the statutory purpose is satisfied, even without proof that the assessee actually expended the amount for that purpose.

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