1985 (8) TMI 97 - AT - Income Tax

Appeal Upheld: Leave Travel Concession Exemption Clarified

The Appellate Tribunal ITAT Bangalore dismissed the appeal and upheld the assessee's claim for leave travel concession exemption. The judgment clarified ... Exemption, Travel Concession or Assistance Issues:1. Whether the leave travel concession exemption can exceed the exemption granted in the first year.Analysis:The judgment by the Appellate Tribunal ITAT Bangalore dealt with the issue of leave travel concession exemption under Section 10(5)(ii) of the Income-tax Act, 1961. The case involved the assessee receiving leave travel concession included in the gross salary, which the Income Tax Officer (ITO) failed to deduct. Upon appeal, the Additional Commissioner of Income Tax (AAC) held that the claim should be sustained as the ITO did not provide any reason for disallowing the claim, which had been allowed in the earlier year. The revenue contended that the exemption for leave travel concession cannot exceed the amount granted in the first year.The relevant provision, Section 10(5)(ii) of the Income-tax Act, outlines the conditions for exemption of travel concession or assistance received by an individual. The judgment highlighted Rule 2B of the Income-tax Rules, 1962, which specifies conditions under which the amount exempt under travel concession may exceed the value received in connection with proceeding to the home district in India. The rule allows for different scenarios where the value of travel concession availed of can exceed the previous amount.The Tribunal emphasized that for non-Government servants, there is no restriction on the leave travel concession received in subsequent blocks of four years exceeding what was received in the first block. The judgment clarified that the rule for non-Government servants cannot impose stricter conditions than those for Government servants. It was noted that if such harsher conditions were imposed, the rule would have to be disregarded. Additionally, the Tribunal found no evidence to support the revenue's arguments against the assessee's claim.In conclusion, the Appellate Tribunal ITAT Bangalore dismissed the appeal, upholding the assessee's claim for leave travel concession exemption. The judgment underscored the interpretation of the relevant provisions and rules governing the exemption of travel concession under the Income-tax Act, emphasizing the absence of restrictions on the amount claimed in subsequent years for non-Government servants.