Special allowance for judicial duty travel treated as exempt, avoiding the conveyance allowance ceiling under income tax rules.

An allowance received by a High Court Judge for maintaining a motor car and meeting travel connected with judicial duties was treated as a special allowance under section 10(14) of the Income-tax Act, not as a conveyance allowance within the proviso to section 16(i). The reasoning was that the payment was linked to expenses wholly, necessarily and exclusively incurred in performing official duties, including travel between residence and court. On that basis, the ceiling applicable to conveyance allowance did not apply, and the assessee was entitled to the full statutory deduction under section 16(i).

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Issues: Whether the allowance received by a High Court Judge under section 22B of the High Court Judges (Conditions of Service) Act, 1954, was a conveyance allowance attracting the ceiling under the proviso to section 16(i) of the Income-tax Act, 1961, or a special allowance exempt under section 10(14) of that Act, so as to entitle the assessee to the full deduction under section 16(i).

Analysis: Section 16(i) grants a graded deduction for salary income, but the proviso limits the deduction to Rs. 1,000 where the assessee receives a conveyance allowance from the employer. Section 10(14) exempts a special allowance granted specifically to meet expenses wholly, necessarily and exclusively incurred in the performance of duties. The allowance under section 22B was subject to maintenance of a motor car and was linked to the performance of judicial duties, including travel between residence and court. On that footing, the allowance was treated not as a mere conveyance allowance but as a special allowance meant to meet part of the car-running expenses incurred for official duties.

Conclusion: The allowance was covered by section 10(14) and did not fall within the proviso to section 16(i); the assessee was entitled to the maximum deduction of Rs. 3,500.

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