TaxTMI 
TaxTMI 
2013 (8) TMI 261
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.... SHORT FACTS 2. Appellant - T.K. Ginarajan, Development Officer in the LIC claimed deduction of 40% of the incentive bonus paid to him in the Return of Income-Tax for the various years prior to 01.04.1989 on the ground that he had incurred expenditure to the extent of 40% of the incentive bonus for canvassing business. LIC of India had requested the Central Board of Direct Taxes (hereinafter referred to as 'CBDT') for a clarification on deduction explaining that the Development Officers had actually incurred some expenditure in the performance of their duty, to the tune of at least 40% of the incentive bonus paid to them. However, the CBDT affirmed that the incentive bonus paid by the LIC to the Development Officers formed part of their ....
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....tificate. What is the fate of the incentive bonus to the Development Officers in LIC prior to 01.04.1989 for the purpose of income-tax is the question to be considered in this case. 4. Income towards salary is explained under Section 15 of the Income- Tax Act, 1961 (hereinafter referred to as 'the Act'). Permissible deductions are provided under Section 16. The inclusive definition of 'salary', 'perquisite' and 'profits' in lieu of salary is given under Section 17 of the Act. It is now trite law that the Income-Tax Act, 1961 is a complete code as far as tax on income is concerned. 'Income' is defined under Section 2(24) of the Act and the computation of income is provided under Chapter-III of the Act (starting with Section 10). In the ca....
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....Central Government or any other employer in the previous year, to the account of an employee under a pension scheme referred to in section 80CCD;" 5. In the case of the appellant, the claim for exclusion of 40% of the incentive bonus towards the expenditure was declined by the Assistant Income-Tax Officer. The Commissioner of Income-Tax (Appeals) dismissed the appeal. However, the Income-Tax Appellate Tribunal held in favour of the assessee. But the High Court was in favour of the Revenue and, thus, the Civil Appeal. 6. The Full Bench of the High Court of Karnataka in Commissioner of Income-Tax vs. M.D. Patil[(1998) 229 ITR 71 (Karnataka)] took the view that incentive bonus earned by the Development Officers of the LIC of India is not....
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....ture of an entertainment allowance or other perquisite within the meaning of clause (2) of section 17, specifically granted to meet expenses wholly, necessarily and exclusively incurred in the performance of the duties of an office or employment of profit, to the extent to which such expenses are actually incurred for that purpose." 7. "Perquisite" is excluded from the purview of Section 10(14). 'Perquisite' is defined under Section 17(2) of the Act. Explanation 3 under Section 17(2) clearly provides that: ""Salary" includes the pay, allowances, bonus or commission payable monthly or otherwise or any monetary payment, by whatever name called, from one or more employers, as the case may be, ...." 8. That apart, what is excluded unde....
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.... self contained code and taxability of the receipt of any amount or allowance has to be determined on the basis of the meaning given to the words or phrases given in the Act. Thus, we do not agree with the view taken by the High Court of Gujarat in Kiranbhai's case (supra). The same does not lay down the correct principle of law. 10. Though learned counsel for the appellant made a persuasive attempt to place reliance on the decision of this Court in State of West Bengal and Others vs. Texmaco Limited[(1999) 1 SCC 198], we are afraid the same is of no assistance to the appellant. The incentive bonus referred to in the said decision is the special scheme of the company. The question considered in the said decision was as to whether the sai....