Travelling allowance and conveyance allowance distinction determines availability of deduction under income-tax law.

Travelling allowance paid to an employee could not be treated as a conveyance allowance for the purpose of denying the deduction under section 16(iv) of the Income-tax Act, 1961, where the employee used his own motor car for employment duties and the employer's payment was less than the actual travelling expenses incurred for work. On those facts, the statutory condition for disallowance was not met, because the amount received was not characterised as reimbursement of conveyance expenditure in respect of travel for employment. The employee was therefore entitled to the deduction claimed under section 16(iv).

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Issues: Whether the amount received by the assessee as travelling allowance could be treated as a conveyance allowance so as to deny deduction under section 16(iv) of the Income-tax Act, 1961.

Analysis: The assessee used his own motor car in the course of employment and the allowance paid by the employer was found to be less than the actual travelling expenses incurred for the employer's work. On that factual footing, the amount received could not be characterised as a conveyance allowance in respect of expenditure on travelling for the purposes of employment. The statutory condition for denying the deduction was therefore not satisfied.

Conclusion: The assessee was entitled to the deduction claimed under section 16(iv) of the Income-tax Act, 1961.

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