TaxTMI 
TaxTMI 
2022 (10) TMI 281
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.... case as well as law on the subject, the learned CIT (Appeals), Valsad, has erred in upholding action of the AO of disallowing claim of Rs.8,34,845 being 30% of Income of Incentive Bonus Commission of Rs.27,82,817/- after placing reliance on the Apex Court's Decision in case of T. Ginarajan Vs. CIT 356 ITR 618 (2013) facts of which are totally different from case of your appellant. 3. On the facts and circumstances of the case as well as law on the subject, the learned CIT (Appeals). Valsad, has erred in upholding action of the AO of disallowing claim of allowance u/s.10(14) of conveyance expenses of Rs.6,95,704/- made on the basis of certificate issued by the employer company i.e. LIC. 4. On the facts and circumstances of the case as well as law on the subject, the learned CIT (Appeals). Valsad, has erred in upholding action of the AO of disallowing claim on conveyance expenses of Rs.6.95,704/- claimed u/s. 10(14) without appreciating the fact that the said expenses were only reimbursed by the employer company i.e. LIC towards discharge of field duties and were not income of your appellant. 5. On the facts and circumstances of the case as well as law on the subject, the ....
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....e entire amount. Therefore, Assessing Officer held that the claim of deduction on account of Incentive Bonus against Salary Income has wrongly been claimed by the assessee and his reliance on Hon'ble Gujarat High Court's decision in the case of K H Shelat, 235 ITR 635 cannot help his case. Hence, Assessing Officer held that on the facts and circumstances and the settled position of law, the claim of Incentive Bonus was disallowed against Salary Income and was added back to the total income of the assessee at Rs.8,34,845/-. 5. Aggrieved by the order of the Assessing Officer, the assessee carried the matter in appeal before ld. CIT(A) who has dismissed the appeal of the assessee. 6. Aggrieved by the order of the ld. CIT(A), the assessee is in further appeal before us. 7. The Learned Counsel for the assessee, submitted that assessee is entitled to claim the deduction of Rs.8,34,845/- being 30% of incentive bogus commission on Rs.27,82,817/-. For that, Ld. Counsel relied on the judgment of the Hon'ble Supreme Court in the case of T K Ginarajan vs CIT, 36 taxmann.com 583 (SC), wherein the relevant findings of the Court is as follows: "3. However, with effect from 01.04.....
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.... is found that the assessee has been able to establish that to that extent, actual expenses were incurred for increase of the business of LIC. Neither the A.O. nor the learned DR of the revenue could point out that any expenses out of Rs. 13,41,092.94 is not incurred for increase of the business of LIC. Under these facts, by respectfully following this judgment of Hon'ble Apex Court rendered in the case of T. K. Ginarajan vs. CIT (Supra), we hold that to the extent of 30% of incentive bonus which comes to Rs. 921,736/- should be allowed as deduction from Incentive bonus as against deduction of Rs. 12,28,982/- claimed by the assessee on account of expenses incurred for the business of LIC to the extent of 40% of Incentive Bonus Rs. 30,72,453/- received from LIC. Since, we are following the judgment of Hon'ble Apex Court, other judgments of various High Courts including that of Hon'ble Allahabad High Court are not relevant. This issue is decided partly in favour of the assessee." 10. We have heard both the parties and carefully gone through the submissions put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the facts of t....
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....ahabad High Court in the case of Sr. Branch Manager, of LIC vs CIT, 21 taxmann.com 310 (All. HC) vide paper book page no.10 to 11, wherein it was held as follows: "10. The ultimate responsibility being of the assessee i.e. Development Officer it is for the income tax authorities while computing the income of the Development Officer to allow or disallow the particular deduction claimed as conveyance or additional conveyance allowance but, due to above reason it cannot be said that the Form-24 which has been submitted by the LIC is incorrect or an obligation is cast on the Life Insurance Corporation of India to deduct the tax at source. In case the allowances were of such a nature which could not have been claimed as deduction under Section 10(14), obviously, the statutory liability would have been thereof the Corporation to deduct the tax at source but present is not a case of such an allowance where it was obligatory for the Corporation to deduct the tax at source. The Punjab and Haryana High Court in Branch Manager, LIC of India (supra) has also taken the same view after following the judgment of Rajasthan High Court. The Punjab and Haryana High Court was also considering the ca....
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....lowances have actually been spent for the purpose of which they were given wholly, necessarily and exclusively in the performance of duties. Therefore, the Life Insurance Corporation cannot be insisted for deduction of tax to be deducted at source to the extent such conveyance allowance/additional conveyance allowance is exempt under Rule 2BB and further such minimum limit is set from time to time. The ultimate liability of claiming exemption and proving the same is on the employee-assessee, i.e. the Development Officers. The Tribunal after detailed discussion on the contentions of the parties and also keeping in view the fact that the Revenue had not challenged the earlier orders passed by the Tribunal on the same issue, pertaining to different offices of the LIC, upheld the order passed by the Commissioner of Income tax (Appeals) and dismissed the appeal of the Revenue. The reasons given above and respectfully concurring with the view taken by the Rajasthan High court in Life Insurance Corporation of India's case [2003] 260 ITR 41, we do not find any reason to differ with the view taken by the Tribunal and hold that no substantial question of law arises in the present cas....
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....icer noted that there is absolutely no case of claiming or allowing any expenditure against Salary income. Therefore, Assessing Officer disallowed sum of Rs.3,84,532/- and added back to the total income of the assessee. 21. Aggrieved by the order of Assessing Officer, the assessee carried the matter in appeal before the ld. CIT(A) who has confirmed the action of the Assessing Officer. Aggrieved, the assessee is in appeal before us. 22. The Learned Counsel for the assessee argued that assessee was paid allowance of Rs.3,47,852/- towards procurement of additional business for which expenses were incurred by the appellant and there is no element of income involved, hence deduction should be allowed. 23. On the other hand, the Ld. DR for the Revenue has primarily reiterated the stand taken by the Assessing Officer, which we have already noted in our earlier para and is not being repeated for the sake of brevity. 24. We have heard both the parites. The Ld. Counsel submits that the LIC Business is unique business and where the assessee incurs expenses on maintenance of collection centre and these expenses are not income of the assessee. As per the nature of business, the assessee has....
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.... K.Pullarao has considered the ratio laid down by the decision of Hon'ble jurisdictional High Court and allowed the exemption claimed by the assessee and held as under: "in the case of employees of the State or Corporations, whether statutory or otherwise, where the employer after having surveyed the actual expenditure necessary for performance of the duty, grants actual allowance generally to all the employees, it is to be presumed that the entire expenditure has been incurred for the purpose for which it has been granted, for if it not incurred for which is has been given, it would entail disciplinary action against the employee. Unless such a case has been initiated against an employee by an employer, the said presumption that the employee has incurred the expenditure for which it is granted, will apply and it will not be necessary for the employees to submit accounts every month to the employer and along with return to the assessing authority. If, in such matters, filing of the accounts and vouchers/receipts are by the Income-tax authorities, it will lead to voidable waste of time and expenditure and would serve no useful purpose but on the contrary it would be counter -produ....
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....the case of A Srinivasa Rao, we are of the opinion that the exemption claimed by the assessee needs favourable consideration. As discussed earlier, the case law relied upon by the AO in Ramayya & Others is related to incentive bonus and is not applicable to the facts of the present case. Accordingly, the orders passed by the Ld.CIT(A) are set aside and the appeals filed by the assessees are allowed." 25. We have heard both the parties and carefully gone through the submissions put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the facts of the case including the findings of the ld. CIT(A) and other material brought on record. We note that Co-ordinate Bench of ITAT, Rajkot in the case of Nitibhai Bhuptani, in ITA Nos.13 & 14/Rjk/2016, wherein it was held as follows: "19. Ground No. 5 in A.Y. 2012-13:- This issue has been discussed by the Ld. CIT(A) as under:- The AO had made addition of Rs.98985/- being business expenses disallowed as there was no business carried on by assessee. The assessee. Did not agitate this addition. However it was seen that in the body of order the disallowance was stated to be of Rs.43620/-....