1988 (12) TMI 29

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....court only one question of law, at the instance of the Department. The question reads thus : "Whether, on the facts and in the circumstance of the case, the city compensatory allowance received by the assessee during each of the accounting periods relevant to the assessment years 1971-72 and 1972-73 was deductible under section 16(v) of the Income-tax Act, 1961, in computing the taxable income of....

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....arguments advanced, this court answered the first question in favour of the assessee but did not answer the second question as it was considered unnecessary. It is contended that the Legislature, in its wisdom, introduced an Explanation to section 10(14) of the Income-tax Act, 1961, with effect from the commencement of the Act with the object of nullifying the effect of the above judgment. In resp....

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....and exclusively in the performance of his duties." It is seen that this court categorically held that the amounts given by the Government to its employees by way of compensatory (city) allowance are so regulated that the allowance is not at all source of profit to the recipient. The amount received by a Government servant is much less than what he ordinarily spends by reason of his posting to a pa....