Shri Sameer Pravinchandra Desai, Navsari V. Dy.CIT Navsari Circle, Navsari

ITA 166/SRT/2017

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 1548 (ITAT-SURAT)
• Duration Of Justice: 4 year(s) 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 07-07-2022
• Assessment Year: 2013-2014
• Appeal Filed On: 12-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RASESH SHAH; THIS JUDGMENT OF HONBLE APEX COURT
• Keywords: Depreciation; Business expenditure; Salary income; Question of law; TDS; Set aside
• Section: 143(3); 10(14)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JM & DR. A. L. SAINI, AM आयकर अपील सं./ITA No.166/SRT/2017 Assessment Year: (2013-14) (Physical Court Hearing) Samir Pravinchandra Desai, 46, Asha Baug Society, Navsari, Navsari-396445. Vs. The DCIT, Navsari Circle, Navsari. èथायीलेखासं./जीआइआरसं./PAN/GIR No.: ABXPD0331K (Appellant) (Respondent) Assessee by Shri Rasesh Shah, CA Respondent by Shri Vinod Kumar, Sr. DR Date of Hearing 08/07/2022 Date of Pronouncement 06/10/2022 आदेश / O R D E R PER DR. A. L. SAINI, AM: Captioned appeal filed by the assessee, pertaining to the Assessment Year (AY) 2013-14, is directed against the order passed by the Learned Commissioner of Income Tax (Appeals), Valsad [in short “the ld. CIT(A)”] in Appeal No. CIT(A)/VLS/193/16-17/529, dated 07.06.2017 which in turn arises out of an assessment order passed by the Assessing Officer under section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) dated 31.03.2016. 2. Grounds of appeal raised by the assessee are as follows: “1. 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 deduction Rs.8,34,845 being 30% of Income of Incentive Bonus Commission of Rs.27,82,817/-. 2. 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 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. Page | 2 166/SRT/2017/AY.2013-14 Samir Pravinchandra Desai 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 learned CTI" (Appeals), Valsad has erred in upholding action of the AO of disallowing claim of expense of Rs.3,84,532/- incurred for Running & Maintaining Premium Collection Centre of employer company. 6. On the facts and circumstances of the case as well as law on the subject, the learned CIT (Appeals) has erred in holding that no premium collection center is being maintained or run by the appellant. 7. On the facts and circumstances of the case as well as law on the subject, the learned CIT (Appeals) has erred in holding that, even otherwise, amount received from LIC of Rs.3,84,532/- towards running and maintenance of premium collection center will form part of perquisite within meaning of sec. 17(2) of IT Act. 8. The above Grounds of Appeal are without prejudice to and are independent of each other. 9. Your Appellant craves, leave to amend, alter, delete and /or add to or withdraw the foregoing Grounds of Appeal any time before the appeal is decided.” 3. Ground nos. 1 and 2 raised by the assessee, relate to disallowance of claim by Assessing Officer of Rs.8,34,845/- being 30% of income of incentive bonus commission of Rs.27,82,817/-. 4. Brief facts qua the issue are that during the assessment proceedings, Assessing Officer observed from the Salary Certificate (Form 16) issued by the employer, that entire sum of Rs.47,63,813/- has been treated as the Salary of the assessee, including the sum of Rs.8,34,845/- being claimed by the assessee as incentive Bonus. It has been treated as a part and parcel of assessee’s salary and accordingly TDS has also been made on the entire amount including the amount Page | 3 166/SRT/2017/AY.2013-14 Samir Pravinchandra Desai claimed as incentive Bonus. The Assessing Officer noted from the computation of income that assessee has based his deduction not on any statutory provision but on the decision of Hon'ble High Court of Gujarat in the case of Kiran H. Shelat. However, this remains a fact that even though a legal premise has been resorted to by the assessee, there is no statutory basis for claiming such deduction and the assessee has based his entire deduction on the basis of a judicial pronouncement. This is not a case where the amount of Incentive Bonus has been paid to the assessee as reimbursement of an expenditure incurred by the assessee but as a component of his Salary. And as stated, the LIC has treated the whole of the amount as his salary deducting, TDS on the 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 01.04.1989, the LIC itself issued a clarification to the effect that the Development Officers would be entitled to claim reimbursement to the extent of 30% of the incentive bonus granted to them. Thus, the dispute is confined only to the period prior to 01.04.1989 and, thereafter, the Development Officers are entitled to the reimbursement of actual expenses incurred by them, to the extent of 30%. In other words, after Page | 4 166/SRT/2017/AY.2013-14 Samir Pravinchandra Desai 01.04.1989, only that part of the incentive bonus after reimbursing the expenses to the extent of 30% will appear in the salary certificate. 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.” 8. 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. 9. We have heard both the parties and noted that issue under consideration is squarely covered by the judgment of Lucknow Co-ordinate Bench of ITAT, in ITA No.902/LKW/2014 in the case of Rajendra Mani Yadav vs DCIT, wherein it was held as follows: “6. We have considered the rival submissions. We find that the second issue is partly covered in favour of the assessee by this judgment of Hon’ble Apex Court rendered in the case of T. K. Ginarajan vs. CIT (Supra). It was held in this case that with effect from 01.04.1989, the LIC itself issued a clarification to the effect that the D.O. would be entitled to claim reimbursement to the extent of 30 % of the incentive bonus granted to them and thus, the dispute is confined only to the period prior to 01.04.1989 and after 01.04.1989, only balance of incentive bonus after excluding 30% of incentive bonus will be treated as salary income. In the reply dated 26.08.2013 submitted to the A.O. copy on pages 14 to 17 of the paper book, full detail of expenses of Rs.13,41,092.94 incurred for increase of the business of LIC was submitted and photo copy of all bills and vouchers were enclosed. The same are available in the paper book also on pages 36 to 84 of the paper book. Nothing has been shown to us that the prescribed percentage of 30% was later on increased to 40% by LIC. Hence, instead of 40% as claimed by the assessee, deduction can be allowed to the extent of 30% of incentive bonus if it 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 the case Page | 5 166/SRT/2017/AY.2013-14 Samir Pravinchandra Desai including the findings of the ld. CIT(A) and other material brought on record. We note that as per ratio laid down by the Co-ordinate Bench of ITAT, Lucknow in the case of Rajendra Mani (supra), the assessee is entitled to take deduction @ 30% incentives bogus commission. The Co-ordinate Bench has rendered the judgment after considering the judgment of Hon'ble Supreme Court in the case of T. K. Ginarajan, 36 taxmann.com 583 (SC). Hence, respectfully following the judgment of the Co-ordinate Bench in the case of Rajendra Mani, we allow ground no.1 and 2 raised by the assessee. 11. Ground No.3 and 4 raised by the assessee relate to disallowance of Rs.6,95,704/- being claimed under section 10(14) of the Act for conveyance allowance. 12. Brief facts qua the issue are that Assessing Officer noted, during scrutiny proceedings, that the second allowance claimed by the assessee against Salary income is Conveyance Allowance of Rs.6,95,704/-. Since, neither such an allowance has been provided by the statute nor had the assessee provided any legal/judicial basis for it, therefore Assessing Officer was of the view that the claim of deduction is patently unacceptable and is accordingly rejected and added back to the total income of the assessee. 13. Aggrieved by the order of the Assessing Officer, the assessee carried the matter in appeal before the ld. CIT(A), who has confirmed the action of the Assessing Officer. 14. Aggrieved by the order of ld. CIT(A), the assessee is in further appeal before us. 15. The Ld. Counsel for the assessee argued that assessee is entitled to claim conveyance expenses as per the provision of section 10(14) of the Act, and for that he relied on the judgment of Hon'ble Karnataka High Court in the case of Sumphony Marketing Solutions India (P) Ltd. (2017) 79 taxmann.com 425 (Karnataka)(HC) vide page no.7 of the paper book. Therefore, ld Counsel Page | 6 166/SRT/2017/AY.2013-14 Samir Pravinchandra Desai submitted that assessee has claimed the deduction within four corners of the law and hence such claim may be allowed. 16. 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. 17. We have heard both the parties and noted that issue under consideration is squarely covered in favour of assessee by the judgment of Hon'ble Allahabad 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 case of conveyance allowance and additional conveyance allowance received by the Development Officer of the Life Insurance Corporation of India. It is useful to quote the following observation made by the Punjab and Haryana High court:- "...... It is, thus, evident that the conveyance allowance and the additional conveyance allowance are paid to the Development Officers for meeting actual expenditure incurred by them in discharge of their field duties and, thus, wholly, necessarily and exclusively for meeting such expenditure, the allowance is being exempt as per the norms set out in the Life Insurance Corporation circular dated August, 3, 1987, referred to in the preceding para. It appears that the Life Insurance Corporation has, worked out the additional conveyance allowance to the Development Officers considering the probable expenditure for procuring the business. The Life Insurance Corporation appears to have devised the general formula having a reference to the parameters of the business and, thus the payment of additional conveyance allowance is a reimbursement for actual expenditure incurred by the Development Officers on account of conveyance in relation to performance of their duties and the said expenditure has a direct nexus with the performance of duties for development of the insurance business by way of meeting several people and to enrol new life insurance agents and to Page | 7 166/SRT/2017/AY.2013-14 Samir Pravinchandra Desai meet the insurance persons for encouraging them to take insurance policies. Naturally, in such circumstances, touring expenses are incurred on conveyance. Such conveyance expenses are reimbursed by the employer as per the prescribed norms in the name of additional conveyance allowance. The certificate is given by the LIC employer of the minimum amount which the Life Insurance Corporation certifies that it is the amount actually spent by the Development Officers in the performance of their duties. The ultimate liability of claiming exemption and proving the same is on the employee-assess (Development Officer). The exemption limit is restricted by the instructions issued by the Central Board of Direct Taxes from time to time. Therefore, we hold that the Development Officers in the Life Insurance Corporation are entitled to claim exemption under Section 10(14) of the Act in respect of conveyance allowance/additional conveyance allowance upon satisfying the conditions that such allowances 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 case ......... " 11. The next judgment which has been relied by the learned counsel for the appellant in Gwalior Rayon Silk Co. Ltd. which also supports the case of the appellant. Now the judgment which have been relied upon by the learned counsel for the respondent has to be looked into. Judgment on which much reliance has been placed is judgment in "Franco John (supra) and "Life Insurance Corpn.Class I Officers (Bombay) Association (supra). In the Bombay judgment the facts on which the conveyance allowance was claimed was in terms of Rule 9B and there was material i.e. an affidavit filed on behalf of the LIC that conveyance allowance is not reimbursed for expenditure incurred on conveyance in performance of duties of office and the said allowance was paid to all employee whethere as on duty or not irrespective of place of residence. The following is the reason and finding in the said judgment while rejecting the claim of the "Life Insurance Corpn.Class I Officers (Bombay) Association (supra). It is useful to quote the conclusions of the judgment which are in following words:- "....... In the instant case, the affidavit filed on behalf of the respondent No. 1 clearly demonstrates that the conveyance allowance in terms of rule 9(b) of the Rules is not reimbursement for expenditure incurred on conveyance in Page | 8 166/SRT/2017/AY.2013-14 Samir Pravinchandra Desai performance of duties of office. It is an allowance paid to all employees whether on duty or not irrespective of his place of residence and the place of his work and also irrespective of whether he is posted in any of the 2,000 offices of respondent No. 1. Clearly, therefore, there is no doubt whatsoever that the said allowance would not be exempt under section 19(14) of the Income Tax Act, 1961, read with Rule 2BB(1)(c) of the Income-tax Rules, 1962." 18. Respectfully following the judgment of Hon'ble Allahabad High Court in the case of Sr. Branch Manager,of LIC (supra), we allow ground No. 3 & 4 raised by the assessee. 19. Ground nos. 5, 6 and 7 relate to disallowance of expenses of Rs.3,84,532/- incurred for Running & Maintaining Premium Collection Centre. 20. Brief facts qua the issue are that Assessing Officer, during scrutiny proceedings noted that assessee in his computation of income has further reduced his taxable Salary by an amount of Rs.3,84,532/-, which he claims to be an allowable expenditure against Salary Income. The Assessing Officer 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. Page | 9 166/SRT/2017/AY.2013-14 Samir Pravinchandra Desai 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 to incur expenses on collection centers and for that Ld. Counsel relied on the order of Co-ordinate Bench of ITAT, Visakhapatnam in ITA Nos.13 & 14/Viz/2019 (vide PB.21), wherein it was held as follows: “6. We have heard both the parties and perused the material placed on record. On identical facts in the case of Avadhanula Srinivasa Rao, the ITAT allowed the appeal of the assessee following the order of Shri K.Pulla Rao (supra) for the A.Y.2009-10 in ITA no.243/Viz/2017 dated 09.11.2018. Hon’ble Jurisdictional High Court in the case law referred in appeal No.117/1992 observed that "We approve the reasoning of the Tribunal. In our view where amounts are paid to the employees by an employer to meet expenses wholly, necessarily and exclusively for the performance of the duties, such amounts can be exempted to the extent it is shown that it has been incurred for the purpose for which it was granted. 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 insisted upon to claim exemption under section 10(14) of the Act 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-productive. The coordinate bench of the tribunal in the case of B. Chinnaiah& Others (supra) has considered the ratio laid down by the Hon'ble Jurisdictional High Court and allowed the deduction claimed by the assessee. In this view of the matter, we hold that the additional conveyance allowance is exempt under section 10(14) of the Act." The coordinate bench of the Tribunal in the case of 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 Page | 10 166/SRT/2017/AY.2013-14 Samir Pravinchandra Desai 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 -productive". The coordinate bench of the tribunal in the case of K. Pullarao (supra) has considered the ratio laid down by the decision of the Hon'ble Jurisdictional High Court and allowed the deduction claimed by the assessee. For the sake of convenience, the relevant portion of the order of the Hon'ble Jurisdictional High Court, which is extracted d by the ITAT, as under:- "We approve the reasoning of the Tribunal. In our view where amounts are paid to the employees by an employer to meet expenses wholly, necessarily and exclusively for the performance of the duties, such amounts can be exempted to the extent it is shown that it has been incurred for the purpose for which it was granted. 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 insisted upon to claim exemption under section 10(14) of the Act 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-productive. The coordinate bench of the tribunal in the case of B. Chinnaiah & Others (supra) has considered the ratio laid down by the Hon'ble Jurisdictional High Court and allowed the deduction claimed by the assessee. In this view of the matter, we hold that the additional conveyance allowance is exempt under section 10(14) of the Act.” 7. During the appeal hearing the Ld.DR did not bring any other case law to controvert the decisions cited supra. Since the facts are identical, following the ratio laid down by the decision of Hon’ble jurisdictional High Court and the order of this tribunal in 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.” Page | 11 166/SRT/2017/AY.2013-14 Samir Pravinchandra Desai 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/- (maintenance expenses), Rs. 43620/- (transaction fees), staff salary, electricity bills etc. (Rs. 167407/-) and depreciation (Rs.11967/-). The AO was asked to reconcile the discrepancy and having received his report that disallowance needs to be enhanced to Rs.266596, the same was confronted to assessee. The assessee has contested this disallowance stating that disallowance stating that disallowance of Rs.43602 + Rs.43602/- has already been made by AO and that balance expenses were for additional work. Having considered facts and circumstances of the case, I do not find any merit in claim of the assessee. As regards the additional work the assessee has already been allowed expenses of Rs.181226/- in Ground of Appeal 3. No expenses other than above stated reimbursements are allowable to assessee as he is earning income from salary and these are stately business expenses against which no such business income has been shown. Accordingly the business expense of Rs.266596/- are disallowed, which results into enhancement of Rs.266596/- Rs.98985/-= Rs.167611/-. 20. It is a consequential issue, whether assessee is entitle to any expenditure under the head business expenses, it is observed that while dealing with the issue in A.Y. 2010-11 we have held that assessee was not doing any business. He is entitled to the expenses which were reimbursed by the LIC for performing the duty as a Senior Business Associate. The assessee separately cannot claim any expenditure under the head business expenditure. In A.Y. 2011-12 & 2012- 13, the assessee has not given us the breakup of the expenditure additionally given by LIC to him for earning additional incentive or performing duty as a senior business associate. The scheme considered by us in A.Y.2010-11 and reproduced above, authorized 10 % of additional convenience allowance or as allowance of the incentive bonus for procuring business, this 10% is to be determined on the basis of certificate of LIC giving the breakup of these expenditure. Thus this issue is also set aside to the file of Assessing Officer. Ld. Assessing Officer first determined the expenditure which were to be construed as a reimbursed by the LIC for procuring business in the capacity of a senior business associate and thereafter work out the total amount allowable to the assessee in A.Y. 2011-12 & 2012-13. These grounds of appeal are allowed for statistical purposes.” Page | 12 166/SRT/2017/AY.2013-14 Samir Pravinchandra Desai 26. Respectfully following the judgment of Co-ordinate Bench of ITAT, Rajkot, in the case of Nitabhai Bhupatbhai (supra), we allow ground nos. 5 to 7 raised by the assessee. 27. In the result, appeal filed by the assessee is allowed. Order is pronounced in the open court on 06/10/2022 by placing the result on the Notice Board as per Rule 34(5) of the Income Tax (Appellate Tribunal) Rule 1963. Sd/- Sd/- (PAWAN SINGH) (Dr. A.L. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER lwjr /Surat Ǒदनांक/ Date: 06/10/2022 SAMANTA Copy of the Order forwarded to 1. The Assessee 2. The Respondent 3. The CIT(A) 4. CIT 5. DR/AR, ITAT, Surat 6. Guard File By Order // TRUE COPY // Assistant Registrar/Sr. PS/PS ITAT, Surat