2004 (12) TMI 23

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....4,558 and Rs. 19,300 for the three years under reference respectively, received by him over and above his salary from the Corporation?" The reference relates to the assessment years 1980-81 to 1982-83. Briefly stated, the facts giving rise to the present reference are as follows: The respondent-assessee was a Development Officer in the Life Insurance Corporation of India. During the assessment years in question he received certain incentive bonus from the Corporation amounting to Rs. 4,569, Rs. 14,558 and Rs. 19,300, respectively, in addition to his salary. He had claimed the expenses to the tune of 40 per cent, from the incentive bonus in respect of each assessment years. The Income-tax Officer had disallowed the claim. Feeling aggrieve....

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....shna Banik [1995] 215 ITR 901 (Gauhati); (ii) CIT v. Anil K. Hazarika [2001] 248 ITR 8 (SC); and (iii) CIT v. Dr. Mrs. Usha Verma [2002] 254 ITR 404 (P & H). We have given our careful consideration to the submissions made by learned standing counsel and we find that it is not in dispute that the respondent has been employed and was working as a Development Officer in the Life Insurance Corporation of India. A relationship of master and servant existed. In addition to his salary, he received incentive bonus which is co-related with the amount of insurance business done by him as a Development Officer. Section 17 of the Act defines "salary", "perquisite" and "profits in lieu of salary". Clause (1) of section 17 of the Act defines "salary" ....

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.... the Rajasthan High Court in the cases of CIT v. Shiv Raj Bhatia [1997] 227 ITR 7; P.N. Verma v. CIT [1997] 227 ITR 24; CIT v. Moti Mal Mohnot [1996] 134 CTR 88 ; CIT v. Jag Mohan Goyal [1996] 134 CTR 90 ; CIT v. Sheo Raj Bhatia [1999] 235 ITR 523 (Appex.) and the Full Bench of the Karnataka High Court in the case of CIT v. M.D. Patil [1998] 229 ITR 71 has held that incentive bonus forms part of salary and in respect of salary income the deductions which are mentioned in section 16 of the Act alone are admissible in addition to the commission, in respect of any allowance which has been specified in the notifications issued by the Central Government in exercise of its power conferred under section 10(14)(i) or section 10(14)(ii) of the Act t....

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....at the petitioner had not placed any other material, such as, the terms governing the assessee's employment and in the absence of such material being placed on record, it is not possible to take a different view than what has been taken by the Tribunal and the finding recorded by the Tribunal is based on the material on record. The Gauhati High Court, therefore, rejected the reference application and declined to call for a question. In the case of Anil K. Hazarika [2001] 248 ITR 8, the apex court has held that the question as to whether 40 per cent, deduction from the incentive bonus granted by the employer when the incentive bonus is assessable under the head "Salary", is a question of law and after setting aside the order passed by the G....