TaxTMI 
TaxTMI 
1998 (10) TMI 58
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....e expenses of purely personal nature is exempt under section 10(14) of the Income-tax Act, 1961 ? 2. Whether, on the facts and in the circumstances of the case and in law, the Appellate Tribunal was correct in holding that the living allowance is a special allowance specifically granted to meet expenses incurred wholly, necessarily and exclusively in the performance of the duties of an office or employment ?" The facts, in brief, are as follows : The assessment year involved is 1978-79. The assessees, who are five in number, are foreign technicians. They were employed by Messrs. L' Air Liquide of France (hereinafter called as "foreign company"). Messrs. Bharat Heavy Plate and Vessels Ltd., Visakhapatnam (hereinafter called as "Ind....
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.... II Spell 16-8-78 to 9-10-79 3. C. J. Pierra ITA 390/83 I Spell not available 84,144 4. M. J. Mason ITA 391/83 not available 87,908 5. F. A. J. Joseph ITA 392/83 not available 77,375 The assessees claimed exemption of these allowances under section 10(14) of the Income-tax Act, 1961 (for short "the Act"). The Income-tax Officer did not agree with the claim of the assessees on the ground that the allowance is being granted to defray the expenses of purely personal nature. On appeal, the Commissioner of Income-tax (Appeals) held that a sum of Rs. 200 per day could be considered as expenses which e....
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....ieu of or in addition to salary or wages. The amount received as living allowance was not assessable". Learned standing counsel submits that under section 10(14) of the Act any special allowance paid is exempt provided it has nexus with the duties to be performed by the assessee. In order to appreciate the contention of learned standing counsel for the Revenue, it would be relevant here to extract section 10(14) of the Act which is in the following terms : "Any special allowance or benefit, not being in the nature 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 offi....
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....uld be to meet the expenditure incurred in the performance of duties of an office or employment of profit. According to the agreement, the assessees were paid daily fees and living allowance at the rates specified therein. In addition they were also provided with living accommodation with air conditioner, refrigerator and electricity and water, and free transport from place of residence to work site and back daily. In other words, in addition to daily fees they were paid a living allowance. From the agreement it is not clear as to for what purposes this living allowance was given, whether it is for the purpose of meeting the personal expenditure of the assessees or for the purpose of meeting expenditure incurred by them in the performance o....