The ACIT,Vapi Circle, Vapi V. Shri Jaysukh R.Patel, Dist.Valsad

ITA 4162/AHD/2007

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 9594 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 10 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-10-2010
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 07-10-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 21-11-2007
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K M MAHESH
• Keywords: Gift; Salary income
• Section: 10(14); 147; 148; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'C' BEFORE SHRI MAHAVIR SINGH,JM & SHRI A N PAHUJA,AM ITA NO.4162/AHD/2007 (ASSESSMENT YEAR:-2005-06) ASSISTANT COMMISSIONER OF INCOME-TAX, VAPI CIRCLE, VAPI V/S SHRI JAYSUKH RATILAL PATEL, AT RAMPORE, PO SUKESH, TAL: KILLA PARDI 396 125 [PAN: ABRPP 4783 B] [APPELLANT] [RESPONDENT] REVENUE BY :- SHRI K M MAHESH, DR ASSESSEE BY:- SHRI TUSHAR HEMANI, AR O R D E R A N PAHUJA: THIS APPEAL BY THE REVENUE AGAINST AN ORDER DATED 14- 09-2007 OF THE LD. CIT(APPEALS), VALSAD, RAISES THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW THE CIT(A) HAS ERRED IN ALLOWING THE CLAIM OF THE ASSESSEE OF INCENTIVE BONUS OF RS.4,83,872/- AND ADDITIONAL CONVEYANCE ALLOWANCE O F RS.2,81,900/-. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LEARNED CIT(A) HAS GRANTED RELIEF TO THE ASSESSEE WITHOUT D ISTINGUISHING THE RATIOS LAID DOWN IN THE JUDGMENTS REPORTED IN 257 ITR 790, 267 1TR 763, 263 TIR 536, 184 CTR 420, 253 ITR 790 AND 229 ITR 71 AS RE LIED ON BY THE AO IN THE ASSESSMENT ORDER. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LEARNED CIT(A) HAS ERRED IN GRANTING RELIEF TO THE ASSESSEE RELYING UPON THE DECISION OF THE HONBLE GUJARAT HIGH COURT REPORTED IN 235 ITR 635 THOUGH THE SAID JUDGMENT HAS BEEN DISTINGUISHED BY THE HON 'BLE MUMBAI HIGH COURT IN THE CASE REPORTED IN 248 ITR 819 SUBSEQUEN TLY FOLLOWED BY THE HON'BLE RAJASTHAN HIGH COURT IN THE CASE REPORTED I N 257 ITR 790. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LEARNED CIT(A) HAS ERRED IN ALLOWING THE CLAIM FOR HIGHER E XEMPTION U/S. 10(14) OF THE IT ACT THEN WHAT IS ALLOWED BY EMPLOYER IN RESP ECT OF CONVEYANCE AND ADDITIONAL CONVEYANCE ALLOWANCE, KEEPING IN VIEW TH E GOVERNMENT OF INDIA'S NOTIFICATION NO. S. O. 940 (E) DATED 25.09. 01 AMENDING IT RULES WITH EFFECT FROM 01.04.01. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.9,540/- MA DE ON ACCOUNT OF ITA NO.4162/AHD/2007 2 ACCRUED INTEREST ON NSC WITHOUT CONSIDERING THE FAC T THAT NOT EVIDENCE FOR SUCH IN FORM OF CERTIFICATE WAS FILED BY ASSESSEE A ND INTEREST WAS PAID ON THE BORROWINGS OF HOUSE CONSTRUCTION WHICH WAS NOT COMPLETED DURING THE YEAR. 6. IT IS THEREFORE, PRAYED THAT THE ORDER OF THE LE ARNED CIT(A) BE SET ASIDE AND THAT THE ORDER OF THE AO BE RESTORED. THE APPELLANT CRAVES TO ADD, ALTER OR AMEND ANY GRO UNDS OF APPEAL. 2 FACTS, IN BRIEF, AS PER RELEVANT ORDERS ARE THAT RETURN DECLARING INCOME OF RS.16,48,930/- FILED ON 13-02-2006 BY THE ASSESSEE, A DEVELOPMENT OFFICER WITH THE LIFE INSURANCE CORPORA TION [LIC],WAS PROCESSED U/S 143(1) OF THE INCOME-TAX ACT, 1961 [H EREINAFTER REFERRED TO AS THE ACT].SUBSEQUENTLY, THE ASSESSI NG OFFICER (AO IN SHORT) NOTICED THAT THE ASSESSEE CLAIMED DEDUCTION OF CONVEYANCE ALLOWANCE- RS.2,81,900 AND INCENTIVE BONUS- RS.4,83 ,872/- FROM THE GROSS SALARY . SINCE THE HONBLE MP HIGH COURT HAD HELD IN CIT VS. GURUDEO SINGH JAGGI,267 ITR 763 THAT DEDUCTION ON A DDITIONAL CONVEYANCE ALLOWANCE IS ALLOWED ONLY IF THE ASSESSE E HAS ACTUALLY INCURRED THE EXPENDITURE WHILE THERE WERE NO DETAIL S ON RECORD TO SHOW THAT THE ASSESSEE ACTUALLY INCURRED AN EXPEND ITURE OF RS.2,81,900/-,REFERRING TO DECISIONS IN CIT VS. A K GHOSH (2003), 263 ITR 536,CIT VS. T.K.GINARAJAN,253 ITR 790(KERAL A),CIT VS. MD PATEL,229 ITR 71(KARNATAKA) AND H M PAREKH VS. CIT, 257 ITR 790 (RAJ), THE ASSESSMENT WAS REOPENED U/S 147 OF THE A CT WITH THE ISSUE OF A NOTICE U/S 148 ON 24-10-2006. IN RESPONS E, THE ASSESSEE FILED RETURN DECLARING INCOME OF RS.16,48,930/- ON 21-11-2006. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSEE EXPLAINED THAT BEING A DEVELOPMENT OFFICER, NATU RE OF HIS DUTIES REQUIRED EXPENDITURE ON TRAVELLING, MAINTENANCE OF CA R, EMPLOYEES, STATIONERY, AGENTS TRAINING, MEETINGS, PRIZE COMPETITIONS, GIFT TO AGENTS, RICKSHAW FARE, ETC.. SINCE HE HAD INCURRED EXPENDITURE IN PERFORMANCE OF HIS DUTIES , DEDUCTION SHOULD BE ALLOWED IN VIEW OF DECISION OF THE HON OROUBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. KIRAN H SHELAT,235 ITR 635(GUJ ) OUT OF INCENTIVE BONUS ITA NO.4162/AHD/2007 3 COMMISSION AND ON THE DECISION OF HONOURABLE MP HI GH COURT IN THE CASE OF A K GHOSH AND OTHERS IN RESPECT OF HIS CLAIM FOR CONVEY ANCE AND ADDITIONAL CONVEYANCE. HOWEVER, THE AO AFTER ANALYZING THE IN CENTIVE BONUS SCHEME, 1997 AND THE 'REIMBURSEMENT SCHEME OF EXPENSE, 1997 , DID NOT ACCEPT THE SUBMISSIONS OF THE ASSESSEE AND CONCLUD ED THAT THE DECISION OF HONBLE GUJRAT HIGH COURT, HOLDING THAT THE D.O. W AS ENTITLED TO CLAIM SUCH DEDUCTION ONLY TO THE EXTENT OF REIMBURSEMENT OF E XPENSES ACTUALLY INCURRED UP TO THE MAXIMUM LIMIT OF THIRTY PERCENT OF THE INCENTIVE BORING EARNED BY HIM, WAS IN THE CONTEXT OF OLD S CHEME EXISTING PRIOR TO 1997. SINCE THE LIC INTRODUCED THE INCEN TIVE BONUS SCHEME, 1997 ALONGWITH THE REIMBURSEMENT OF EXPEN SES SCHEME, 1997, THE REIMBURSEMENT OF EXPENSES SCHEME APPLIES TO ALL THOSE DOS WHO EARN INCENTIVE BONUS IN THE RELEVANT APPRAI SAL YEAR IN ACCORDANCE WITH THE I.B. SCHEME 1997 AND ELIGIBLE D .O.S' CAN CLAIM THE AMOUNT TO BE REIMBURSED UNDER THE SCHEME. THER EFORE, AS PER REIMBURSEMENT EXPENSES SCHEME, THE D.O. WAS ENTITLE D TO CLAIM THE FOLLOWING EXPENSES INCURRED IN THE PERFORMANCE OF D UTIES FOR EARNING THE INCENTIVE BONUS: I. FOR MOBILIZING & MOPPING OF ELIGIBLE PREMIUM (PRODUCTIVITY) TIN OUCH AGENTS I.E., PRODUCTIVITY II. FOR DEVELOPMENT AND BUILDING UP OF CLIENTELE CO NTACT. III. FOR RECRUITMENT AND ASSISTANCE TO THE AGENTS O F MY ORGANIZATION. IV. FOR CONDUCTING AGENTS TRAINING MEETINGS. V. FOR AGENTS COMPETITION 2.1 THE AO FURTHER POINTED OUT THAT THE AFORES AID REIMBURSEMENT WAS LIMITED TO AN OVERALL CEILING AS PER THE INSTRU CTIONS OF THE LIC FROM TIME TO TIME. THE D.O. WAS REQUIRED TO SUBMIT A DECLARATION OF THE EXPENDITURE INCURRED FOR PERFORMANCE OF DUTIES FOR EARNING INCENTIVE BONUS AND PREFER THE CLAIM FOR REIMBURSE MENT OF EXPENSES IN FORMAT PRESCRIBED I.E. ANNEXURE-A. HE WAS ALSO R EQUIRED TO FURNISH ANNEXURE-B FOR REIMBURSEMENT OF CLAIM BESIDES ANNEX URE-C, WHICH WAS THE REPORT IN RESPECT OF THE AGENTS MEETINGS AN D COMPETITIONS ITA NO.4162/AHD/2007 4 HELD BY HIM IN THE RELEVANT APPRAISAL YEAR. AS PER THIS ANNEXURE, HE HAS TO FURNISH THE PROOF OF EXPENSES INCURRED AND T HE LIC REIMBURSED THE ACTUAL EXPENDITURE INCURRED. THE CLA IM OF EXPENSES IN RESPECT OF ITEMS AT SR. NO. I) & III) ABOVE WAS ON THE BASIS OF THE PREMIUM ELIGIBILITY. SINCE THE EXACT QUANTUM OF THE EXPENDITURE WAS DIFFICULT TO BE WORKED OUT, A FORMULA WAS DEVIS ED, BASED ON PRODUCTIVITY/NET ELIGIBLE PREMIUM ETC FOR GRANTING THESE EXPENSES. IN RESPECT OF THE ITEMS AT SR. NO. IV & V , THE ASSESS EE WAS REQUIRED TO FURNISH EVIDENCE IN. SUPPORT OF THE EXPENSES. THE EXPENSES REIMBURSED IN THE REIMBURSEMENT SCHEME WERE NOT CON SIDERED FOR THE PURPOSE OF COMPUTATION OF SALARY U/S. 15 R.W.S 17. NO PART OF THESE REIMBURSED EXPENSES WAS INCLUDED IN SALARY AS WAS APPARENT FROM THE SALARY CERTIFICATE ISSUED BY LIC IN FORM N O. 16 AND TOTAL AMOUNT OF RS. 189055/- WAS STATED TO HAVE BEEN REI MBURSED TO THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION UNDER THE REIMBURSEMENT OF EXPENSES SCHEME AS PER THE FOLLOW ING BIFURCATION: A. REIMBURSEMENT OF PRODUCTIVITY EXPENSES - 60000 B. REIMBURSEMENT OF BLDG UP OF CLIENTELE EXPENSES 36000 C. REIMBURSEMENT OF RECRUITMENT OF AGENTS EXPENSES 50000 D. REIMBURSEMENT OF AGENTS TRAINING EXPENSES 3305 5 E.. REIMBURSEMENT OF AGENTS COMPETITION EXPENSE 1 0000 -------- 189055 2.2 ACCORDINGLY, THE AO CONCLUDED THAT WITH THE INTRODUCTION OF REIMBURSEMENT OF EXPENSES SCHEME IN 1997, THE INCEN TIVE BONUS HAS TO BE TREATED AS PART OF THE SALARY FOR THE PUR POSE OF TAX. THUS, THE CLAIM OF THE ASSESSEE FOR FURTHER DEDUCTION @3 0% OF THE INCENTIVE BONUS IN ADDITION TO THE EXPENSES REIMBUR SED TO HIM AS PER THE REIMBURSEMENT OF EXPENSES SCHEME, 1997, WAS NO T TENABLE BEING NOT IN TUNE WITH THE DECISION OF HONBLE BOMB AY HIGH COURT ORDER IN THE CASE OF SHRI C.M. SHAH, THE AO OBSER VED. AS REGARDS JUDGMENT OF THE HON'BLE GUJARAT HIGH COURT IN THE C ASE OF CIT VS. KIRAN SHELAT 1999 235 ITR 635 (GUJ), THE AO OBSERVE D THAT THE SAID ITA NO.4162/AHD/2007 5 DECISION WAS RELEVANT TO THE ASSESSMENT YEAR PRIOR TO AY 1997-98. ACCORDINGLY, THE AO CONCLUDED THAT FURTHER DEDUCTIO N OF EXPENSES @ 30% OF INCENTIVE BONUS WAS NOT ALLOWABLE, INTER ALI A, IN VIEW OF DECISIONS IN CIT VS. A. K. GHOSH [2003] 263 ITR 5 35, DIPAK MISHRA- 184 CTR [MP] 420, H. M. PAREEK VS. CIT 257 ITR 790 [RAJ], CIT VS. T. K. GINARJAN 253 ITR 790 [KERALA] AND CI T VS. M. D. PATIL 229 ITR 71 [FULL BENCH]. THE AO ALSO POINTED OUT A DECISION IN HM PAREEK(SUPRA),WHEREIN FOLLOWING THEIR DECISION IN CIT VS. GOPAL KRISHNA SURI & OTHERS, 248 ITR 819, DISTINGUISHING THE JUDGMENT OF THE HONBLE GUJARAT HIGH COURT IN K. H. SHELAT(SU PRA), THE HONBLE RAJASTHAN HIGH COUNT HELD THAT INCENTIVE BONUS WAS PART OF SALARY . THE PROPOSITION THAT EXPENDITURE HAS TO BE DEDUCTED WHILE TREATING INCENTIVE BONUS AS A PROFIT IN THE HANDS OF THE ASS ESSEE WAS AGAINST THE PRINCIPLE LAID DOWN BY THE APEX COURT IN KARMAC HARI UNION VS. UNION OF INDIA (2000)(243 ITR 242), THE AO ADDED. 3. AS REGARDS CLAIM FOR ADDITIONAL CONVEYANCE A LLOWANCE, THE AO POINTED OUT THAT THE ASSESSEE CLAIMED DEDUCTION O F CONVEYANCE & ADDL. CONVEYANCE ALLOWANCE OF RS.2,81,900/-,RELYING UPON THE JUDGMENT OF HONBLE M.P. HIGH COURT IN THE CASE OF A.K.GHOSH(SUPRA). THE ISSUE IN THE SAID CASE W AS DECIDED ON THE BASIS OF NOTIFICATION NO. 606 DT. 9.6.99 OF GOV ERNMENT OF INDIA. THEREAFTER, THE GOVERNMENT OF INDIA ISSUED NOTIFIC ATION DATED 25.9.01 AMENDING THE I.T. RULES W. E. F 1.4.01. ACC ORDINGLY, IN. CASE OF DOS DESIRING A HIGHER AMOUNT OF EXEMPTION ON ACC OUNT OF CONVEYANCE ALLOWANCE AND ADDL. CONVEYANCE ALLOWANCE WERE REQUIRED TO SATISFY THE FOLLOWING CONDITIONS: I. MAINTENANCE OF COMPLETE DETAILS OF JOURNEY UNDER TAKEN FOR OFFICIAL PURPOSE WHICH INCLUDES DETAILS OF JOUR NEY DESTINATION, MILEAGE, AND THE AMOUNT OF EXPENDITURE INCURRED THEREON. II. GIVING A CERTIFICATE THAT THE EXPENDITURE WAS I NCURRED WHOLLY AND EXCLUSIVELY FOR THE PERFORMANCE OF THE O FFICIAL DUTIES; ITA NO.4162/AHD/2007 6 III. THE SUPERVISORY AUTHORITY OF THE EMPLOYEE, WHE REVER APPLICABLE GIVES CERTIFICATE, GIVES CERTIFICATE TO THE EFFECT THAT THE EXPENDITURE WAS INCURRED WHOLLY AND EXCLUS IVELY FOR THE PERFORMANCE OF OFFICIAL DUTIES. THEY WERE REQUIRED TO MAINTAIN A LOG BOOK CONTAININ G THE DETAILS OF JOURNEY UNDERTAKEN BY THEM WHICH IN TURN HAS TO BE CERTIFIED BY SR. BRANCH MANAGER IN CHARGE. THE PETROL/DIESEL BILLS E TC HAVE ALSO TO BE PRODUCED FOR CLAIMING HIGHER AMOUNT OF EXEMPTION FROM INCOME TAX DEDUCTIBLE AT SOURCE. THEREFORE, THE AO ASKED THE ASSESSEE TO PRODUCE LOG BOOK & OTHER DETAILS BILLS, VOUCHERS ET C WHICH HE WAS REQUIRED TO MAINTAIN. HE WAS FURTHER ASKED TO FILE JUSTIFICATION TO THE FACT THAT JOURNEYS WERE UNDERTAKEN FOR THE PERFORMA NCE OF HIS DUTIES. HOWEVER, THE ASSESSEE DID NOT PRODUCE THE LOG BOOK AND OTHER DETAILS AND MERELY FURNISHED SELF MADE VOUCHERS AN D SOME OF THE BILLS ISSUED BY THE PETROL PUMP FOR AN AMOUNT OF RS .67,826/- BESIDES OTHER EXPENDITURE OF RS.1,95,367/- UNDER THE HEAD S TAFF SALARY / CONVEYANCE / MOBILE / STATIONERY / INSURANCE ETC. S INCE NO DETAILS REGARDING JOURNEYS UNDERTAKEN, PLACE AND NUMBE R OF PERSONS ATTENDING THE MEETINGS AND RESULT OF SUCH MEETINGS WERE FURNISHED NOR ANY OTHER EVIDENCE IN ORDER TO ASCERTAIN AS TO WHETHER OR NOT THE EXPENDITURE WAS INCURRED FOR THE PROFESSIONAL P URPOSE OR PERSONAL PURPOSES WHILE THE ASSESSEE HAD REC EIVED REIMBURSEMENT OF EXPENSES OF RS.1,89,055/- FROM TH E EMPLOYER , THE AO DISALLOWED THE CLAIM FOR DEDUCTION OF RS. 2,81,900/-. 4. ON APPEAL, THE LEARNED CIT(A) CONCLUDED ON T HE CLAIM FOR ADDITIONAL CONVEYANCE ALLOWANCE IN THE FOLLOWING TE RMS: 5.3 I HAVE GONE THROUGH THE FINDINGS OF THE AO A S HAS BEEN REFLECTED IN THE ASSESSMENT ORDER. I HAVE ALSO CARE FULLY PERUSED THE SUBMISSION AS MADE BY THE AR AND ALSO T HE JUDICIAL FINDINGS AS RELIED UPON BY HIM. AFTER GOIN G THROUGH THE PROVISIONS OF SECTION 10(14), IT IS FOUND THAT WHIL E COMPUTING THE TOTAL INCOME OF AN ASSESSEE OF A PREVIOUS YEAR, ANY SPECIAL ALLOWANCE OR BENEFIT, NOT BEING IN THE NATURE OF PE RQUISITE ITA NO.4162/AHD/2007 7 WITHIN THE MEANING OF CLAUSE (2) OF SECTION 17 ESPE CIALLY GRANTED TO MEET EXPENSES WHOLLY, NECESSARILY AND EX CLUSIVELY INCURRED IN THE PERFORMANCE OF THE DUTIES OF AN OFF ICE OR EMPLOYMENT OF PROFIT (AS MAY BE PRESCRIBED) TO THE EXTENT TO WHICH SUCH EXPENSES ARE ACTUALLY INCLINED FOR THAT PURPOSE WILL NOT BE INCLUDED. THE REMARK THAT THE AO HAS ERRED I N DISALLOWING THE FULL AMOUNT OF RS.2,81,900/- HAS AL SO BEEN CONSIDERED BY ME, ' AFTER HAVING CONSIDERED THE SUBMISSIONS OF THE APPE LLANT AS WELL AS THEN TIDINGS OF THE AO IN THE ASSESSMENT OR DER, I FIND THAT THERE IS A FORCE IN THE ARGUMENTS OF THE AR TH AT GOVERNMENT NOTIFICATION NO.606 DATED 09/06/1989 HAS SPECIFIED THAT THE CONVEYANCE ALLOWANCE GRANTED IN PERFORMANCE OF THE DUTY/IS EXEMPTED FROM TAX. THE F INDINGS OF THE HON'BLE MADHYA PRADESH HIGH COURT ARE CLEAR-CUT AND RELIANCE WAS PLACED BY THE COURT ON THE ABOVE MENTI ONED NOTIFICATION AS WELL AS THE FACTUAL SCENARIO IN PRO PER PERSPECTIVE KEEPING IN VIEW THE INSTRUCTION OF LIC AND GAZETTE NOTIFICATION ISSUED BY THE GOVERNMENT OF INDIA. IT IS ALSO TRUE THAT A SALARIED EMPLOYEE CANNOT BE EXPECTED TO MAIN TAIN LOG BOOK, EACH AND EVERY BILL AND VOUCHER FOR THE JOURN EYS TAKEN IN. PERFORMANCE OF THE DUTY. IN THE INSTANT CASE TH E APPELLANT DID MAINTAIN BILLS AND VOUCHERS IN SUPPORT OF THE C LAIM IN WHICH THE AO HAS NOT PIN-POINTED ANY GLARING DEFECTS. II IS NOT VERY RELEVANT ONLY TO TAKE INTO CONSIDERATION THE INTERN AL PROCEDURE DEVISED BY LIC BECAUSE THE SAME IS ALWAYS WITH A LI MITED INTENTION TO COMPLY WITH TDS LAW AND TO ARRIVE AT T HE TDS REQUIRED TO BE MADE FROM THE PAYMENT TO THE DEVELOP MENT OFFICER. ONLY BECAUSE THE EMPLOYER HAS MADE TDS ON THE ENTIRE GROSS AMOUNT AND SHOWN THE ALLOWANCE AS TAXA BLE IN FORM NO.16, IT WOULD NOT VITIATE THE CLAIM OF EXEMP TION OF THE APPELLANT. WHAT IS DECISIVE IS WHETHER THE ALLOWA NCE HAS BEEN GRANTED TO SPECIFICALLY INCUR THE SAME IN PERF ORMANCE OF THE DUTY OF OFFICE OR NOT. THE NAME ITSELF SUGGESTS THAT IT IS AN 'ALLOWANCE' AND NOT A 'PAY' OR 'PERQUISITE'. EVEN T HE LIC HAS CERTIFIED IN FORM NO.16 ITSELF, THAT THE APPELLA NT EMPLOYEE MAY OPT FOR THE ADDITIONAL ALLOWANCE / EXEMPTION BEFORE THE ASSESSING OFFICER. THIS PARTICULAR OBSERVATION IS V ERY RELEVANT TO SUGGEST THAT LIC WAS CONSERVATIVE FROM THE VIEW POINT OF TD5 LIABILITY AND THEREFORE, 'BE CONVEYANCE ALLOWAN CE HAS BEEN SHOWN AS TAXABLE IN FORM NO. 16 TO ENSURE CONS ERVATIVE APPROACH IN TDS COMPLIANCE. IT DOESN'T IMPLY THAT T HE APPELLANT HAS NOT SPENT SUCH AMOUNT IN PERFORMANCE OF THE DUTY OF OFFICE. ESPECIALLY WHEN THE APPELLANT HAS M AINTAINED BILLS AND VOUCHERS IN SUPPORT OF THE CLAIM, THERE I S NO PLAUSIBLE REASON TO DISBELIEVE HIS CLAIM. ITA NO.4162/AHD/2007 8 BASED ON ABOVE DISCUSSIONS AND AUTHORITIES RELIED U PON, I AM OF THE, VIEW THAT ENTIRE AMOUNT OF RS.2,81,900/- IS ALLOWABLE AS THE SAME HAS BEEN GRANTED BY LIC OF INDIA TO (HE AP PELLANT TO SPECIFICALLY MEET THE EXPENSES WHOLLY, NECESSARILY AND EXCLUSIVELY IN PERFORMANCE OF THE DUTY AS A FIELD O FFICER OF LIC OF INDIA. IN VIEW OF THE ABOVE DISCUSSED FACTS, I A M OF THE VIEW THAT THE AO WAS NOT JUSTIFIED IN DISALLOWING THE FU LL AMOUNT OF RS.2,81,900/- OUT OF CONVEYANCE AND ADDITIONAL CONV EYANCE ALLOWANCE AS THE SAME IS ALLOWABLE U/S. 10(14). THU S, THE AO IS DIRECTED TO ALLOW THE FULL CLAIM OF RS.2,81,900/ - AS PER RETURN OF INCOME OF THE APPELLANT AND IN THE RESULT, THE A PPELLANT'S GROUNDS OF APPEAL NO-3 IS ALLOWED. 5. AS REGARDS DEDUCTION OUT OF INCENTIVE BONUS , THE LD. CIT(A) HELD THAT 6.5 AFTER GOING THROUGH THE FINDINGS OF THE AO IN THE ASSESSMENT ORDER AND ALSO AFTER PERUSING THE SUBMIS SION AS MADE BY THE AR (AS STATED ABOVE) AND THE CASE LAWS RELIED UPON BY HIM, I AM OF THE VIEW THAT THE FINDINGS OF THE GUJARAT HIGH COURT IN THE CASE OF CIT V/S KIRANBHAI H.SHELA T AND ITAT AHMEDABAD IN CASE OF BALVANT.S.DESAI AID AMRUT R. P ATEL RESPECTIVELY ARE VERY RATIONALISED AND FULLY APPLIC ABLE TO THE FACTS OF THE CASE OF THE APPELLANT AND RESPECTFULLY FOLLOWING THAT, I ALLOW THE CLAIM OF RS.4,83.872 MADE BY THE APPELLANT @ 30% OF THE INCENTIVE BONUS, RECEIVED BY HIM TREATIN G THE SAME AS INCURRED FOR THE PURPOSE OF DUTY. THUS, THE APPE LLANT'S GROUND NO-2 IS ALLOWED. 6 THE REVENUE IS NOW IN APPEAL BEFORE US AGAINST T HE AFORESAID FINDINGS OF THE LEARNED CIT(A). THE LEARNED DR WHI LE REFERRING TO INCENTIVE BONUS SCHEME-1997 & REIMBURSEMENT SCHEME OF EXPENSES-1997 FOR DEVELOPMENT OFFICERS OF LIC, CONT ENDED THAT THE LEARNED CIT(A) WAS NOT JUSTIFIED IN GRANTING RELIEF TO THE ASSESSEE RELYING UPON THE DECISION OF THE HONBLE GUJARAT HI GH COURT IN THE CASE OF KIRAN H SHELAT(SUPRA) SINCE THE SAID DECISI ON WAS RENDERED IN THE CONTEXT OF OLD SCHEME. MOREOVER, THE SAID JU DGMENT HAS BEEN DISTINGUISHED BY THE HONBLE BOMBAY HIGH COURT IN T HE CASE REPORTED IN CIT VS. GOPAL KRISHNA SURI,248 ITR 819, FOLLOWED SUBSEQUENTLY BY THE HONBLE RAJASTHAN HIGH COURT IN HM PAREEK VS. CIT,257 ITR 790(RAJ).AS REGARDS ADDITIONAL CONVEYAN CE ALLOWANCE, THE LD. DR POINTED OUT THAT THE LEARNED CIT(A) WAS NOT JUSTIFIED IN ITA NO.4162/AHD/2007 9 ALLOWING THE CLAIM FOR HIGHER EXEMPTION U/S 10(14) OF THE ACT THEN WHAT WAS ALLOWED BY THE EMPLOYER IN RESPECT OF CONV EYANCE ALLOWANCE AND ADDITIONAL CONVEYANCE ALLOWANCE, KEEP ING IN VIEW THE GOVERNMENT OF INDIAS NOTIFICATION NO. S.O. 940 (E) DATED 25-09- 2001 AMENDING IT RULES,1962 WITH EFFECT FROM 01-04- 2001.ON THE OTHER HAND, THE LEARNED AR ON BEHALF OF THE ASSESSE E SUPPORTED THE FINDINGS OF THE LEARNED CIT(A) AND CONTENDED THAT THE ENTIRE AMOUNT OF ADDITIONAL CONVEYANCE ALLOWANCE HAS BEEN GIVEN A S REIMBURSEMENT ONLY AND SPENT IN THE PERFORMANCE OF DUTIES AND THAT THERE WAS NO REQUIREMENT IN LAW TO MAINTAIN BOOKS O F ACCOUNTS AND OTHER SUCH DETAILS. INTER ALIA, THE LD. AR RELIED U PON DECISIONS IN CIT VS. AK GHOSH,263 ITR 536 (MP) ,267 ITR 763 (MP), LI C VS. UNION OF INDIA & OTHERS,260 ITR 41 (RAJ) AND CIT VS. CHANDUL AL J PATEL ,127 ITR 786 (GUJ). THE LD. AR ALSO REFERRED TO CERTAIN DEC ISIONS,HOLDING THAT IF TWO VIEWS ARE POSSIBLE, THE VIEW IN FAVOUR OF TH E ASSESSEE HAS TO BE ADOPTED. REGARDING DEDUCTION OUT OF INCENTIVE B ONUS, THE LD. AR RELIED UPON DECISIONS OF THE HONBLE ITAT IN ACIT V S. AMRATLAL R PATEL [ITA NO.1717/A/2006, DATED 11-09-2006, ACIT V S. NAILESH DESAI [ITA NO.2960-1/A/2006, & 2962 TO 2966/A/2007 DATED 27-11- 2007 AND ACIT VS. MUKESH B DESAI [ITA NO.1767 AND 1768/A/2006, DATED 06-10-2006, FOLLOWING THE DECISION IN THE CAS E OF KIRAN H SHELAT (SUPRA). 7. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE FACTS OF THE CASE. AS REGARDS THESE ISSUES OF DEDUCTION OF ADDITIONAL CONVEYANCE ALLOWANCE AND DEDUCTION OUT OF INCENTIVE BONUS, WE FIND THAT THE AO DISALLOWED THE CLAIM FOR DEDUCTION OF ADDITIONAL CONVEYANCE ALLOWANCE SINCE THE ASSESSEE CLAIMED THE EXPENDITURE ON SELF MADE VOUCHERS AND PRODUCED PETR OL PUMP SLIPS FOR AN EXPENDITURE OF ONLY RS.67,826/- BESIDES CLAIMING OT HER EXPENDITURE OF RS.1,95,367/- WHILE THE ASSESSEE HAD ALREADY RECEI VED REIMBURSEMENT OF EXPENSES OF RS. 1,89,055/- FROM THE EMPLOYER WHICH HAD BEEN EXEMPTED FROM TAX. IN THE ABSENCE OF ANY EVIDENCE OF INCURRING OF EXPENDITURE ACTUALLY, THE AO DISALLOWED THE CLAIM IN THE LIGHT OF NOTIFICATION N O. SO 940 DATED 25.9.2001 ITA NO.4162/AHD/2007 10 AMENDING IT RULES,1962 W.E.F. 1.4.2001. ON APPEAL, THE LD. CIT(A) ALLOWED THE CLAIM U/S 10(14) OF THE ACT IN THE LIGHT OF NOTIFICATION NO.606 DATED 09/06/1989 AND DECISION OF THE HONBLE MP HIGH COURT IN CIT VS . AK GHOSH,184 CTR 420. THE LD. AO FURTHER DISALLOW ED THE CLAIM FOR DEDUCTION OF 30% OF THE INCENTIVE BONUS IN THE LIG HT OF AFORESAID 1997 SCHEME AND DISTINGUISHING THE DECISION IN THE CASE OF KIRAN H SHELAT(SUPRA) WHILE THE LD. CIT(A) ALLOWED THE CLAI M IN TERMS OF THE SAID DECISION. BEFORE PROCEEDING FURTHER, WE MAY HA VE A LOOK AT THE RELEVANT PROVISIONS OF SEC. 10(14) OF THE ACT, WHIC H GOVERN THE EXEMPTIONS OF SUCH NATURE. THE PROVISIONS OF SAID S ECTION READ AS UNDER: (I) ANY SUCH SPECIAL ALLOWANCE OR BENEFIT, NOT BE ING IN THE NATURE OF A PERQUISITE WITHIN THE MEANING OF CLAUSE (2) OF SE CTION 17, SPECIFICALLY GRANTED TO MEET EXPENSES WHOLLY, NECES SARILY AND EXCLUSIVELY INCURRED IN THE PERFORMANCE OF THE DUTI ES OF AN OFFICE OR EMPLOYMENT OF PROFIT, AS MAY BE PRESCRIBED, TO THE EXTENT TO WHICH SUCH EXPENSES ARE ACTUALLY INCURRED FOR THAT PURPOS E; 7.1 THE RULE 2BB(1) PRESCRIBING THE ALLOWANCES FOR THE PURPOSE OF SEC.10(14) OF THE ACT, READS AS UNDER: 2BB. PRESCRIBED ALLOWANCES FOR THE PURPOSES OF CLA USE (14) OF SECTION 10. (1) FOR THE PURPOSES OF SUB-CLAUSE (I) OF CLAUSE (1 4) OF SECTION 10, PRESCRIBED ALLOWANCES, BY WHATEVER NAME CALLED, SHA LL BE THE FOLLOWING, NAMELY:--- (A) ANY ALLOWANCE GRANTED TO MEET THE COST OF TRAVE L ON TOUR OR ON TRANSFER; (B) ANY ALLOWANCE, WHETHER, GRANTED ON TOUR OR FOR THE PERIOD OF JOURNEY IN CONNECTION WITH TRANSFER, TO MEET THE OR DINARY DAILY CHARGES INCURRED BY AN EMPLOYEE ON ACCOUNT OF ABSEN CE FROM HIS NORMAL PLACE OF DUTY; (C) ANY ALLOWANCE GRANTED TO MEET THE EXPENDITURE I NCURRED ON CONVEYANCE IN PERFORMANCE OF DUTIES OF AN OFFICE OR EMPLOYMENT OF PROFIT: ITA NO.4162/AHD/2007 11 PROVIDED THAT FREE CONVEYANCE IS NOT PROVIDED BY TH E EMPLOYER; (D) ANY ALLOWANCE GRANTED TO MEET THE EXPENDITURE I NCURRED ON A HELPER WHERE SUCH HELPER IS ENGAGED FOR THE PERFORM ANCE OF THE DUTIES OF AN OFFICE OR EMPLOYMENT OF PROFIT; (E) ANY ALLOWANCE GRANTED FOR ENCOURAGING THE ACADE MIC, RESEARCH AND TRAINING PURSUITS IN EDUCATIONAL AND RESEARCH I NSTITUTIONS; (F) ANY ALLOWANCE GRANTED TO MEET THE EXPENDITURE I NCURRED ON THE PURCHASE OR MAINTENANCE OF UNIFORM FOR WEAR DURING THE PERFORMANCE OF THE DUTIES OF AN OFFICE OR EMPLOYMEN T OF PROFIT. EXPLANATION: FOR THE PURPOSE OF CLAUSE (A), 'ALLOWA NCE GRANTED TO MEET THE COST OF TRAVEL ON TRANSFER' INCLUDES ANY S UM PAID IN CONNECTION WITH TRANSFER, PACKING AND TRANSPORTATIO N OF PERSONAL EFFECTS ON SUCH TRANSFER. 7.2 IN RESPECT OF CLAIM FOR DEDUCTION OF ADDITI ONAL CONVEYANCE ALLOWANCE, WE ARE CONCERNED WITH CLAUSE (C) OF THE AFORESAID RUL ES. IN ORDER TO ALLOW EXEMPTION IN TERMS OF THE AFORESAID PROVISIONS, WHAT IS STIP ULATED IS THAT THE EXPENDITURE SHOULD BE WHOLLY, NECESSARILY AND EXCLUSIVELY ACTUA LLY INCURRED IN THE PERFORMANCE OF THE DUTIES OF AN OFFICE OR EMPLOYMEN T OF PROFIT . THE AO CONCLUDED THAT THE ASSESSEE DID NOT FURNISH NECESSARY DETAILS IN SUPPORT OF EXPENDITURE ON CONVEYANCE ACTUALLY INCURRED WHILE THE LD. CIT(A) H ELD OTHERWISE. THE DETAILS REGARDING THE SAID EXPENDITURE WERE NOT PLACED BEF ORE US. BUT A NUMBER OF DECISIONS WERE REFERRED TO BY BOTH THE SIDES. HERE , WE MAY HAVE A LOOK AT THE RELEVANT DECISIONS ON THE ISSUES BEFORE US . HONB LE GUJRAT HIGH COURT IN THEIR DECISION IN CIT VS. CHANDULAL J PATEL ,127 ITR 786 IN THE CONTEXT OF THE EXTANT PROVISIONS OF SEC. 16(V) OF THE ACT APPLICABLE FOR THE AYS 1968-69 & 1969-70 HELD THAT THE ASSESSEE PROVIDED WITH CAR BY HIS EMPLOY ER AND ALSO PAID CONVEYANCE ALLOWANCE AND THE ASSESSEE BY THE CONDITIONS OF HI S SERVICE REQUIRED TO SPEND THE AMOUNTS OUT OF HIS REMUNERATION WHOLLY, NECESSA RILY AND EXCLUSIVELY IN THE PERFORMANCE OF HIS DUTIES, WAS ENTITLED TO DEDUCTIO N OF EXPENSES INCURRED ON MAINTENANCE AND USE OF CAR UNDER S. 16(V) OF THE A CT. 7.3 IN CIT VS. MD PATIL,229 ITR 71(KARNATAKA) , HONBLE HIGH COURT FOLLOWING THEIR EARLIER DECISION IN CIT V. K. C. PATIL (I.T.R .C. NO. 2 OF 1989, DATED APRIL 3, ITA NO.4162/AHD/2007 12 1992), HELD THAT THE INCENTIVE BONUS/COMMISSION WAS NOT GRANTED BY THE LIFE INSURANCE CORPORATION FOR THE PURPOSE AS SET OUT IN SECTION 10(14) AND, THEREFORE, THE ASSESSEE COULD NOT CLAIM SUSTENANCE OF 40 PER C ENT. DEDUCTION BY TAKING SHELTER UNDER SECTION 10(14) OF THE ACT. 7.4 IN HM PAREEK VS. CIT, 257 ITR 790(RAJ), HONB LE RAJASTHAN HIGH COURT HELD THAT SINCE THE DEVELOPMENT OFFICER OF THE LIFE INS URANCE CORPORATION IS A SALARIED EMPLOYEE, THE INCENTIVE BONUS RECEIVED BY HIM IS P ART OF SALARY . THEREFORE, THERE IS NO QUESTION OF ANY DEDUCTION OUT OF THAT BONUS AMOUNT. 7.5 IN LIC VS. UNION OF INDIA & OTHERS ,260 IT R 41(RAJ),HONBLE RAJASTHAN HIGH COURT HELD THAT DEVELOPMENT OFFICERS IN THE L IFE INSURANCE CORPORATION WERE ENTITLED TO CLAIM EXEMPTION UNDER SECTION 10(1 4) OF THE ACT IN RESPECT OF CONVEYANCE ALLOWANCE/ADDITIONAL CONVEYANCE ALLOWANC E UPON SATISFYING THE CONDITIONS THAT SUCH ALLOWANCES HAVE ACTUALLY BEEN SPENT FOR THE PURPOSE FOR WHICH THEY WERE GIVEN WHOLLY, NECESSARILY AND EXCLU SIVELY IN THE PERFORMANCE OF DUTIES 7.6 IN CIT VS. AK GHOSH,263 ITR 536(MP),HONBLE MP HIGH COURT HELD WHILE FOLLOWING THE VIEW TAKEN BY THE HONBLE HIGH COURT S OF BOMBAY, CALCUTTA, MADRAS, KARNATAKA, RAJASTHAN, KERALA, ORISSA AND PU NJAB AND HARYANA THAT INCENTIVE BONUS PAID TO THE DEVELOPMENT OFFICERS WO RKING IN THE LIFE INSURANCE CORPORATION, IS ONLY A PART OF THE SALARY OF THE AS SESSEES AND THE ASSESSEES ARE NOT ENTITLED TO ANY DEDUCTION OVER AND ABOVE THE ST ANDARD DEDUCTION. AS REGARDS CONVEYANCE ALLOWANCE/ ADDITIONAL CONVEYANCE ALLOWAN CE,HONBLE HIGH COURT CONCLUDED THAT THE SAID ALLOWANCES ARE EXEMPTED UN DER SECTION 10(14) OF THE ACT. 7.7 IN CIT VS. GURDEO SINGH JAGGI,267 ITR 763( MP), HONBLE MP HIGH COURT REITERATED THEIR VIEW IN AK GHOSH(SUPRA) ITA NO.4162/AHD/2007 13 7.8 WE FIND THAT HONBLE BOMBAY HIGH COURT I N THEIR DECISION REPORTED IN CIT V. GOPAL KRISHNA SURI [2001] 248 ITR 819 , AFTER ANALYZING THE TERMS AND CONDITIONS OF SERVICE OF DEVELOPMENT OFFICERS OF LI C HELD AS UNDER : 'THERE IS UNANIMITY AMONG THE HIGH COURTS ON THE ST ATUS OF THE DEVELOPMENT OFFICERS AS FULL TIME EMPLOYEES OF THE LIFE INSURAN CE CORPORATION. A PERUSAL OF THE SERVICE RULES SHOWS THAT THE MAIN TASK OF THESE OFF ICERS IS TO DEVELOP THE BUSINESS OF LIFE INSURANCE. SUCH DEVELOPMENT IS MEASURED BY THE AMOUNT OF PREMIUM SECURED IN THE FIRST YEAR ON THE NEW POLICIES BY RE ASON OF EFFORTS PUT IN BY THE DEVELOPMENT OFFICERS. THE EFFICIENCY OF THE DEVELOP MENT OFFICERS IS JUDGED WITH REFERENCE TO THE AMOUNT OF FIRST YEAR'S PREMIUM THA T HE OBTAINS AND IF THE AMOUNT OF PREMIUM IS AT LEAST FIVE TIMES THE YEARLY EXPENS ES INCURRED BY THE LIFE INSURANCE CORPORATION ON THE DEVELOPMENT OFFICERS, THEN THEIR PERFORMANCE IS REGARDED AS SATISFACTORY. WITH A VIEW TO ENCOURAGE SUCH OFFICERS TO RISE ABOVE THE MINIMUM STANDARD, THEY ARE GIVEN INCENTIVES. SIMILA RLY, IF THEIR PERFORMANCE FALLS BELOW THE MINIMUM STANDARD, THEN THEY ARE PENALISED BY WAY OF DISINCENTIVES. THE SCHEME IS APPLICABLE ONLY TO THE EMPLOYEES OF T HE LIFE INSURANCE CORPORATION AS A FULL TIME EMPLOYEE, A DEVELOPMENT OFFICER RECE IVES SALARY AND THAT SALARY IS LIABLE TO DECREASE IF HIS EFFICIENCY FALLS BELOW A STANDARD WHICH IS MEASURED BY THE COST RATIO. THE REMUNERATION PAYABLE TO SUCH OFFICE RS UNDER THE RULES CANNOT EXCEED CERTAIN PERCENTAGE OF THE NET ELIGIBLE PREMI UM COLLECTED ON THE POLICIES SECURED BY THE DEVELOPMENT OFFICERS. THE INSTRUCTIO N ALSO STATES THAT THE INCENTIVE BONUS SHALL BE PAYABLE ONLY TO THOSE OFFI CERS WHOSE COST RATIO IS LESS THAN A STIPULATED PERCENTAGE. UNDER THE CIRCUMSTANC ES, THE AMOUNT PAID AS INCENTIVE, THE AMOUNT PAID AS REMUNERATION AS ALSO THE AMOUNTS PAID AFTER DEDUCTING THE DISINCENTIVES CONSTITUTE SALARY IN TH E HANDS OF THE EMPLOYEES. SUCH PAYMENTS DO NOT HAVE ANY OTHER LEGAL CHARACTER. SEC TIONS 16 AND 17 OF THE INCOME-TAX ACT ARE WIDE ENOUGH TO TAKE WITHIN THEIR AMBIT ALL THE ABOVE PAYMENTS WHICH ARE MADE ONLY BY VIRTUE OF THE DEVELOPMENT OF FICER BEING AN EMPLOYEE OF THE LIFE INSURANCE CORPORATION. THESE PAYMENTS ARE IN THE NATURE OF COMMISSION WHICH IS CALCULATED AT A PERCENTAGE OF THE PREMIUM GENERATED. HENCE, THEY ARE EXIGIBLE TO TAX AS PART OF SALARY INCOME. ONCE THES E PAYMENTS ARE EXIGIBLE TO TAX AS SALARY INCOME THEN 'SUCH EMPLOYEES CANNOT CLAIM ANY DEDUCTION OTHER THAN STANDARD DEDUCTION UNDER SECTION 16. SIMILARLY, IN THE ABSENCE OF ANY NOTIFICATION UNDER SECTION 10(14) GRANTING EXEMPTION, THE INCENT IVE BONUS IS LIABLE TO BE ASSESSED TO TAX AS SALARY.' 7.9 SIMILARLY IN THE CASE OF B.M. PARMAR, DEVELOPMENT OFFICER, LIC OF INDIA V. CIT [1999] 235 ITR 679 (P & H), THE HONBLE HIGH COURT HELD INCENTIVE BO NUS IS ASSESSABLE UNDER THE HEAD 'SALARIES' AND NOT UNDER THE HEAD 'PROFITS AND GAINS OF BUSINESS OR PROFESSION'. IT WAS FURTHER HELD THAT D EDUCTION UNDER SECTION 16(I) OF THE ACT IS ADMISSIBLE UNDER THE HEAD 'SALARIES' AND NO SEPARATE DEDUCTION ON ACCOUNT OF EXPENDITURE IS PERMISSIBLE. ITA NO.4162/AHD/2007 14 7.10 LIKEWISE ,THE HONBLE MADRAS HI GH COURT IN THE CASE OF CIT V. P. ARANGASAMY [2000] 242 ITR 563 HAVE HELD : 'PROFITS, FEES, COMMISSIONS AND PERQUISITES REFERRE D TO IN SECTION 17(1)(IV) MAY BE IN LIEU OF OR IN ADDITION TO REGULAR SALARY OR WAGE S. THEY ARE ALL AS SUCH TAXABLE AS REGULAR SALARY OR WAGES. A LUMP SUM PAID IN LIEU OF A TAXABLE BENEFIT IS EQUALLY TAXABLE. THE PAYMENT MUST BE A REWARD OR RETURN FOR HIS ACTING AS AN EMPLOYEE. INCENTIVE BONUS CANNOT IN ANY VIEW BE PROPERLY REGA RDED AS 'PROFIT' FOR THE EARNING OF WHICH EXPENDITURE IS REQUIRED TO BE INCURRED AND WHICH EXPENDITURE CAN BE CLAIMED AS A DEDUCTION. IT CAN AT BEST BE REGARDED AS A COMMISSION AS IT IS CALCULATED AS A PERCENTAGE OF THE PREMIUM GENERATED . NO DEDUCTION THEREAFTER IS PERMISSIBLE WHILE COMPUTING THE TOTAL INCOME OF THE ASSESSEE. HAVING REGARD TO THE SCHEME PROVIDING FOR THESE PAYMENTS WHICH SHOWS IN ABUNDANTLY CLEAR TERMS THAT THE INCENTIVE IS AN ADDITION TO THE NORMAL REM UNERATION FOR PERFORMANCE AT A LEVEL HIGHER THAN THE MINIMUM IT IS ONLY AN ADDITIO N TO THE SALARY. INCENTIVE BONUS PAID IS NOT ONLY TO DEVELOPMENT OFFICERS OF THE LIF E INSURANCE CORPORATION BUT TO WORKERS IN ALMOST EVERY LARGE INDUSTRY AND SUCH INC ENTIVE BONUS HAS NOT BEEN REGARDED AS 'PROFIT'.' 7.11 A FULL BENCH OF THE KARNATAKA HIGH COURT IN THE CASE OF CIT V. M.D. PATIL [1998] 229 ITR 71 HELD THUS: '...KEEPING IN VIEW THE AFORESAID DISCUSSION, SINCE A DEVELOPMENT OFFICER RECEIVES THE INCENTIVE BONUS/COMMISSION BASED ON TH E INSURANCE BUSINESS PROMOTED BY HIM BUT IN ADDITION TO THE SALARY PAYAB LE TO HIM, THEREFORE, THE ADDITIONAL INCOME SO DERIVED BY THE DEVELOPMENT OFF ICER DURING THE COURSE OF AND PURSUANT TO THE TERMS AND CONDITIONS OF HIS EMPLOYM ENT CAN BE BROUGHT TO TAX ONLY UNDER THE HEAD OF INCOME 'SALARY' AND NOT UNDE R THE HEAD 'PROFIT AND GAINS OF BUSINESS OR PROFESSION' AND FURTHER THE ONLY DEDUCT IONS PERMISSIBLE UNDER THE PROVISIONS OF THE ACT ARE TO BE THOSE AS SPECIFIED IN SECTION 16 OF THE ACT.' 7.12 IN THIS CONTEXT IT IS WORTH REFERRING TO A DECISION RENDERED IN THE CASE OF CIT V. RAMLAL AGARWALA [2001] 250 ITR 828 (CAL), WHEREIN THE DIVISION BENCH REFERRED TO A JUDGMENT OF THE ANDHRA PRADESH HIGH C OURT RENDERED IN THE CASE OF K.A. CHOUDARY V. CIT [1990] 183 ITR 29 AND HELD THUS: 'IN THE CASE OF K.A. CHOUDARY V. CIT [1990] 183 ITR 29 , THE ANDHRA PRADESH HIGH COURT HAS RELIED ON THE DECISION OF THE SUPREM E COURT IN GESTETNER DUPLICATORS (P.) LTD. V. CIT [1979] 117 ITR 1 AND ALSO ON THE DECISION IN THE CASE OF M. KRISHNA MURTHY V. CIT [1985] 152 ITR 163 (AP), WHEREIN THE VIEW HAS BEEN TAKEN ON INCENTIVE BONUS WHILE CONSIDERING THE APPL ICABILITY OF SECTION 40A OF THE INCOME-TAX ACT. THAT INCENTIVE BONUS FORMS PART OF THE SALARY. ONCE THE STANDARD DEDUCTION UNDER SECTION 16 OF THE INCOME-TAX ACT IS ALLOWED, NO FURTHER DEDUCTION IS WARRANTED FROM THE BONUS RECEIPTS. ITA NO.4162/AHD/2007 15 WE ARE IN AGREEMENT WITH THE ANDHRA PRADESH HIGH CO URT WHEN THE EMPLOYEE RECEIVED BONUS FROM THE EMPLOYMENT WHILE IN EMPLOYM ENT FOR THE EXTRA WORK, THIS IS NOTHING BUT FORMS PART OF THE SALARY AND ONCE TH E STANDARD DEDUCTION IS ALLOWED TO THE ASSESSEE AS EMPLOYEE TREATING HIS INCOME AS SALARY INCOME THERE IS NO QUESTION OF ANY FURTHER ALLOWANCE OUT OF THE BONUS OR COMMISSION RECEIVED FROM THE EMPLOYMENT' 7.13 WE MAY ALSO REFER TO ANOTHER DECISION REND ERED IN THE CASE OF CIT V. H.S. SANDHU [1999] 237 ITR 167 (P & H). WHILE DEALING WITH QUESTION WHICH PERTAIN S TO ALLOWING OF DEDUCTION OF 40 PER CENT IN REGARD T O INCENTIVE BONUS THE BENCH EXPRESSED THE VIEW AS UNDER: 'QUESTION NO.1 IS CONCLUDED BY THE JUDGMENT OF THIS COURT IN INCOME-TAX REFERENCES NOS. 105 AND 106 OF 1986, DECIDED ON OCT OBER 27, 1998, IN THE CASE OF B.M. PARMAR, DEVELOPMENT OFFICER, LIC V. CIT [19 99] 235 ITR 679 , WHEREIN THE QUESTION HAS BEEN ANSWERED IN FAVOUR OF THE REVENUE AND AGAINST THE ASSESSEE. IN THAT VIEW OF THE MATTER, THIS QUESTION IS ANSWER ED IN THE NEGATIVE, I.E., IN FAVOUR OF THE REVENUE AND AGAINST THE ASSESSEE.' 7.14 IN THE CASE OF CIT V. T.K. GINARAJAN, D EVELOPMENT OFFICER, LIC OF INDIA [2002] 253 ITR 463 , THEHONBLE HIGH COURT OF KERALA HELD AS UNDER: 'WE ARE UNABLE TO ACCEPT THE FINDING OF THE TRIBUNA L THAT 30 PER CENT OF THE INCENTIVE BONUS REPRESENTS THE EXPENDITURE AT THE H ANDS OF THE ASSESSEES. THE TRIBUNAL HAS STATED THAT THE ASSESSEES SHOULD HAVE EXPENDED 30 PER CENT ON ACCOUNT OF THEIR ACTIVITIES WHICH ARE IN THE NATURE OF TRAINING AGENTS, MAINTAINING ESTABLISHMENT FOR THE SAME, ETC. WE DO NOT FIND ANY MATERIAL TO SUPPORT THIS FINDING OF THE TRIBUNAL. THE TRIBUNAL HAS NOT GONE INTO THE NATURE OF DUTIES OF THE DEVELOPMENT OFFICERS, FOR WHICH THEY ARE PAID USUAL SALARY. WE REQUESTED COUNSEL FOR THE ASSESSEES TO CLARIFY THE NATURE OF DUTIES OF THE DEVELOPMENT OFFICERS AND FROM THE NATURE OF DUTIES EXPLAINED BY HIM, WE FEEL WHAT WAS STATED BY THE TRIBUNAL WAS PART OF THE NORMAL DUTIES OF TH E DEVELOPMENT OFFICERS FOR WHICH THEY ARE PAID SALARY. IT IS NOT OUT OF PLACE TO REFER TO THE DETAILS FURNISHED IN THE DECISION OF THE KARNATAKA HIGH COURT, WHEREIN T HE HIGH COURT HAS REFERRED TO SCHEDULE III OF THE REGULATIONS WHICH PROVIDES FOR PAYMENT OF TRAVELLING ALLOWANCES AND REIMBURSEMENT OF OTHER EXPENSES, INC URRED BY THE DEVELOPMENT OFFICERS IN THE NORMAL DISCHARGE OF THEIR DUTIES. T HEREFORE, WE FIND THAT THE INCENTIVE BONUS WHICH IS A SHARE OF PREMIUM ON EXTR A BUSINESS CANVASSED IS AN ADDITIONAL PAYMENT WHETHER IT CAN BE CALLED AS 'COM MISSION', AS WAS DONE BY THE BOMBAY HIGH COURT, OR PROFIT IN LIEU OF SALARY OR I N ADDITION TO SALARY, AS CLAIMED BY THE ASSESSEES AND IS NOTHING BUT SALARY COMING W ITHIN THE MEANING OF THE TERM CONTAINED IN SECTION 15 OF THE INCOME-TAX ACT WE DO NOT FIND ANY PROVISION IN THE INCOME-TAX ACT, EXCEPT SECTION 10(14), FOR ALLOWING DEDUCTION TOWARDS EXPENDITURE OF THIS NATURE CLAIMED BY THE ASSES SEE S. THERE IS NO MATERIAL TO HOLD THAT INCENTIVE BONUS OR ANY PART OF IT IS IN THE NA TURE OF REIMBURSEMENT OF EXPENDITURE BY THE EMPLOYER TO THE ASSESSEE TO QUAL IFY FOR DEDUCTION UNDER ITA NO.4162/AHD/2007 16 SECTION 10(14). IN ANY CASE, EVEN SUCH AN EXPENDITU RE UNDER SECTION 10(14) CAN BE ALLOWED ONLY IF IT IS GRANTED SPECIFICALLY TO ME ET EXPENSES WHOLLY, NECESSARILY AND EXCLUSIVELY INCURRED IN THE PERFORMANCE OF THE DUTIES TO THE EXTENT SUCH EXPENSES ARE ACTUALLY INCURRED FOR THAT PURPOSE. TH EREFORE, SECTION 10(14) DOES NOT ALSO APPLY TO THE CASES AT HAND FOR THE RELEVAN T ASSESSMENT YEARS. 7.15 FOLLOWING THE DECISIONS OF THE HIGH COUR TS AND THE FULL BENCH DECISION OF THE KARNATAKA HIGH COURT IN CIT V. M.D. PATIL [1 998] 229 ITR 71 , AND DISAGREEING WITH THE VIEW OF THE HONBLE GUJARAT HI GH COURT, HONBLE MP HIGH COURT IN A.K.GHOSH & OTHERS(SUPRA) HELD THAT INCE NTIVE BONUS WAS ONLY A PART OF THE SALARY OF THE ASSESSEES AND THE ASSESSEES ARE N OT ENTITLED TO ANY DEDUCTION OVER AND ABOVE THE STANDARD DEDUCTION. IT WAS FURTH ER CONCLUDED THAT THE PROPOSITION CANVASSED BY THE ASSESSEES THAT INCENTI VE BONUS IS 'PROFIT' AND THE PROFIT IN THE HANDS OF THE EMPLOYEES HAS TO BE COMP UTED AFTER DEDUCTING EXPENDITURE IS AGAINST THE PRINCIPLE LAID DOWN IN T HE DECISION OF THE SUPREME COURT IN KARAMCHARI'S CASE [2000] 243 ITR 143 .' 7.16 IN CIT V. BRANCH MANAGER, LIC OF INDIA [2008 ] 298 1TR 358 (P&H) HONBLE HIGH COURT IN THE CONTEXT OF REIMBURSEMENT OF EXPEN SES SCHEME, 1997, FOLLOWED THE VIEW TAKEN BY HONBLE RAJASTHAN HIGH C OURT IN LIFE INSURANCE CORPORATION OF INDIA'S CASE [2003] 260 ITR 41 , HOLDING THAT THE DEVELOPMENT OFFICERS IN THE LIFE INSURANCE CORPORATION WERE ENT ITLED 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 FOR WHICH THEY WERE GIVEN WHOLLY, NECESSARILY AND EXCLUSIVELY IN THE PERFORMANCE OF DUTIES. 7.17 NOW COMING TO THE DECISION OF THE HONBLE J URISDICTIONAL HIGH COURT IN KIRAN H SHELAT(SUPRA). IN THIS DECISION, THE HON BLE JURISDICTIONAL HIGH COURT HELD THAT THE TRIBUNAL COMMITTED AN ERROR IN HOLDING TH AT THE ENTIRE INCENTIVE BONUS EARNED BY THE ASSESSEE AS DEVELOPMENT OFFICER OF TH E LIFE INSURANCE CORPORATION OF INDIA WAS PART OF SALARY WITHIN THE AMBIT OF SECTION 17(1)(IV) OF THE ACT AND THE ONLY DEDUCTION ADMISSIBLE WAS UNDER SEC TION 16(I) OF THE ACT. ACCORDINGLY, HONBLE HIGH COURT HELD THAT THE ASSES SEE WAS ENTITLED TO CLAIM SUCH DEDUCTION BUT ONLY TO THE EXTENT OF REIMBURSEMENT O F EXPENSES ACTUALLY INCURRED ITA NO.4162/AHD/2007 17 UP TO THE MAXIMUM LIMIT OF THIRTY PER CENT OF THE I NCENTIVE BONUS EARNED BY THE ASSESSEE. THE LD. DR POINTED OUT THAT THIS DECISIO N RELATED TO AYS 1983-84 TO 1989-90 THAT IS MUCH BEFORE THE INSERTION OF INC ENTIVE BONUS SCHEME- 1997 & REIMBURSEMENT SCHEME OF EXPENSES-1997 FOR D EVELOPMENT OFFICERS OF LIC AND THAT THERE WAS NOTHING IN THE S AID DECISION TO SUGGEST THAT DEVELOPMENT OFFICERS WERE ALSO ENTITLE D TO DEDUCTION OF CONVEYANCE ALLOWANCE BESIDES INCENTIVE BONUS NOR SUCH AN ISSUE RELATING TO CONVEYANCE ALLOWANCE WAS RAISED BEFORE THE HONBLE HIGH COURT. HOWEVER , WE FIND THAT CO-ORDINATE B ENCHES OF THE ITAT WHILE REFERRING TO THE REIMBURSEMENT SCHEME ,1997 IN THEIR DECISION DATED 11.9.2006 IN ITA NO.1717/AHD./2006 F OR THE AY 2003- 04 IN THE CASE OF AMRATLAL RAVJIBHAI PATEL, DECISIO N DATED 27.11.2007 IN ITA NOS.2960 TO 2966 FOR THE AYS.2001 -02 TO 2005-06 IN THE CASE OF NILESHBHAI UMANGLAL SHAH AND DECISIO N DATED 6.10.2006 IN ITA NOS.1767-1768/AHD./2006 FOR THE A YS 2002-03 & 2003-04 IN THE CASE OF SHRI MUKESHBHAI B DESAI, FOL LOWED THE DECISION IN THE CASE OF KIRANBHAI H SHELAT(SUPRA) AND ALLOWED THE CLAIM FOR DEDUCTION OF EXPENDITURE TO THE EXTENT OF 30% OF THE INCENTIVE BONUS. OUR ATTENTION WAS ALSO DRAWN TO A DECISION DATED 28.11.2007 IN TAX APPEAL NOS. 641 & 642 OF 2007 IN THE CASE OF SHERI MUKESHBHAI B DESAI, WHEREIN THE HONBLE JURIS DICTIONAL HIGH COURT DID NOT FIND ANY MISTAKE IN THE APPROACH OF THE TRIBUNAL IN FOLLOWING THE DECISION IN KIRANBHAI H SHELAT(SUPRA) IN ALLOWING THE CLAIM OF THE ASSESSEE FOR EXPENDITURE INCURRED BY THE DEVELOPMENT OFFICERS IN THE COURSE OF THEIR DUTIES TO THE EXTEN T OF 30 % OF THE INCENTIVE BONUS. 8. IN THE LIGHT OF AFORESAID JUDICIAL VIEW AND CONSIDERING THE FACTS AND CIRCUMSTANCES, EVEN THOUGH A MAJORITY OF THE HONBL E HIGH COURTS HAVE TAKEN THE VIEW THAT INCENTIVE BONUS BEING PART OF SALARY , A DEVELOPMENT OFFICER OF LIC IS NOT ENTITLED TO ANY DEDUCTION OTHER THAN WHAT IS PROVIDED IN SEC. 16 OF THE ACT, HONBLE JURISDICTIONAL HIGH COURT IN THEIR AFORESAI D DECISION DATED 28.11.2007, FOLLOWING THEIR OWN DECISION IN KIRANBHAI H SHELAT( SUPRA) ALLOWED THE CLAIM OF THE ITA NO.4162/AHD/2007 18 ASSESSEE. IN THESE CIRCUMSTANCES, SINCE THE ADD ITIONAL CONVEYANCE ALLOWANCE PROVIDED BY THE EMPLOYER TO THE ASSESSEE FOR TH E PERFORMANCE OF HIS DUTIES FALLS WITHIN THE PROVISIONS OF SECTION 10(14) READ WITH RULE 2BB(1)(C) OF THE IT RULES 1962 WHILE DEDUCTION OF EXPENDITURE TO THE EXTENT OF 30% OF INCENTIVE BONUS HAS TO BE ALLOWED IN TERMS OF THE AFORESAID D ECISIONS OF THE HONBLE JURISDICTIONAL HIGH COURT , WE HAVE NO ALTERNATIVE BUT TO HOLD THAT THE ASSESSEE IS ENTITLED TO DEDUCTION OF EXPENDITURE ACTUALLY INCU RRED TO MEET EXPENSES WHOLLY, NECESSARILY AND EXCLUSIVELY INCURRED IN THE PERFORM ANCE OF HIS DUTIES .HOWEVER, SINCE RELEVANT DETAILS OF THE EXPENSES HAVE NOT BE EN PLACED BEFORE US, THE AO SHALL VERIFY THE DETAILS OF EXPENSES AND ALLOW THE CLAIM OF THE ASSESSEEE TO THE EXTENT ACTUALLY INCURRED BY THE ASSESSEE IN TERMS O F PROVISIONS OF SEC. 10(14) OF THE ACT AS ALSO IN THE LIGHT OF AFORESAID BINDING DECISION OF HONBLE JURISDICTIONAL HIGH COURT. SUBJECT TO THESE DIRECTIONS, GROUND NOS . 1 TO 4 IN THE APPEAL ARE DISMISSED. 9. NEXT GROUND NO.5 RELATES TO DISALLOWANCE OF RS. 9,540/- ON ACCOUNT OF INTEREST. TTHE AO NOTICED ON PERUSAL O F THE COMPUTATION OF TOTAL INCOME THAT THE ASSESSEE CLAIMED AN AMOU NT OF RS.16,440/- ON ACCOUNT OF INTEREST ON BORROWED CAPITAL FOR HOUS E PROPERTY. THE ASSESSEE ENCLOSED A CERTIFICATE ISSUED BY LIC CONF IRMING THE INTEREST PAYMENT OF RS.6,900/- ON THE HOUSING LOAN. HOWEVER NO EVIDENCE FOR THE BALANCE AMOUNT OF RS.9,540/- WAS F ILED WITH THE RETURN. DURING THE COURSE OF ASSESSMENT PROCEEDING S, THE ASSESSEE WAS ASKED TO PRODUCE DETAILS OF INVESTMENT MADE IN THE HOUSE PROPERTY, CERTIFICATE OF INTEREST PAYMENT FROM THE LIC AND COPY OF RECEIPT OF PROPERTY TAX PAID. THE ASSESSEE SUBMITTE D THAT THE HOUSE WAS NOT COMPLETED DURING THE YEAR. HE FURNISHED THE FIRST HOUSE-LAX RECEIPT OF RS.1,575/- FOR THE FINANCIAL YEAR 2005-0 6 DATED 07.11.05. SINCE THE CONSTRUCTION OF HOUSE WAS NOT COMPLETED IN THE ASSESSMENT YEAR 2005-06 AND THE ASSESSEE DID NOT PR ODUCE ANY EVIDENCE OF INCURRING THE EXPENDITURE ON PAYMENT OF INTEREST TO THE EXTENT OF RS. 9,540/-, THE AO REJECTED THE CLAIM OF THE ASSESSEE IN TERMS OF LAST PROVISO TO SECTION 24(B) OF THE ACT. ITA NO.4162/AHD/2007 19 10. ON APPEAL, THE LEARNED CIT(A) ADJUDICATED THE ISSUE AS UNDER:- 7. IN THE GROUND NO-5, THE APPELLANT HAS RAISED TH E CONTENTION THAT THE AO HAS ERRED IN DENYING THE PAR TIAL CLAIM OF RS.9,540/- OUT OF CLAIM OF RS.16,440/- MADE IN THE RETURN OF INCOME ON INTEREST ON HOUSING LOAN. 7.1 THE AO DISALLOWED THE PARTIAL CLAIM OF RS.9.450 /- FOR DEDUCTION OF INTEREST ON HOUSING LOAN FOR WANT OF E VIDENCES. THE APPELLANT SUBMITTED THAT THE EVIDENCES WERE FIL ED BEFORE THE EMPLOYER AND THEREFORE IT WAS NOT POSSIBLE TO O BTAIN COPIES IMMEDIATELY. THE AR ARGUED THAT THE AO DID NOT ALLO W PROPER OPPORTUNITY TO SUBMIT THE SAME AND THEREFORE IT REM AINED TO BE SUBMITTED. THE APPELLANT THEREFORE SUBMITTED THE SA ME DURING THE COURSE OF APPELLATE PROCEEDINGS. THE AR ARGUED THAT AS SUCH THE CLAIM WAS CERTIFIED BY THE EMPLOYER IN FOR M NO-16 AND THEREFORE IT IS NOT A FRESH OR AN ADDITIONAL EV IDENCE AND THE SAME MAY BE CONSIDERED ON MERITS. 7.2 I HAVE CONSIDERED THE FACTS OF THE CASE AND THE CLAIM OF THE APPELLANT. SINCE THE APPELLANT HAS FILED EVIDEN CES IN SUPPORT OF ENTIRE INTEREST PAID ON HOUSING LOAN, TH E PARTIAL DISALLOWANCE OF RS.9,540/- MADE BY THE AO IS UNCALL ED FOR. THE APPELLANT'S GROUND NO.5 IS ALLOWED . 11. THE REVENUE IS NOW IN APPEAL BEFORE US AGAINST THE AFORESAID FINDINGS OF THE LD. CIT(A). THE LD. DR POINTED OUT THAT THE LD. CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE ,EVEN WHEN NO EVI DENCE WAS SUBMITTED BEFORE THE AO IN RESPECT OF CLAIM FOR DED UCTION OF INTEREST WHILE THE CONSTRUCTION OF PROPERTY WAS NOT COMPLET ED IN THE YEAR UNDER CONSIDERATION. THERE IS NOTHING TO SUGGEST TH AT THE ASSESSEE COMPLETED THE CONSTRUCTION OF THE PROPERTY IN THE Y EAR UNDER CONSIDERATION NOR THE LD. CIT(A) RECORDED ANY FINDI NGS ON THAT ASPECT. ON THE OTHER HAND, THE LD. AR MERELY SUPPOR TED THE FINDINGS OF THE LD. CIT(A). 12. WE HAVE HEARD BOTH THE PARTIES AND GONE TH ROUGH THE FACTS OF THE CASE. AS IS APPARENT FROM A MERE GLAN CE AT THE IMPUGNED ORDER, THE LD. CIT(A) DID NOT RECORD ANY F INDINGS ON THE ITA NO.4162/AHD/2007 20 FACTS POINTED OUT BY THE AO THAT THE ASSESSEE HAD NOT COMPLETED THE CONSTRUCTION OF THE PROPERTY IN THE YEAR UNDER CONSIDERATION. IN THESE CIRCUMSTANCES, WE CONSIDER IT FAIR AND APPROP RIATE TO SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THE MATTER TO T HE FILE OF THE AO WITH THE DIRECTIONS TO ALLOW A FINAL OPPORTUNITY TO THE ASS ESSEE FOR ESTABLISHING THEIR CLAIM IN TERMS OF PROVISIONS OF THE SEC. 24(B) OF THE ACT AND THEREAFTER, READJUDICATE THE ISSUE AFRESH IN ACCORDANCE WITH LAW, AFTER ALLOWI NG SUFFICIENT OPPORTUNITY TO THE ASSESSEE, BRINGING OUT CLEARLY THE YEAR OF COMPLET ION OF CONSTRUCTION OF THE SAID PROPERTY. WITH THESE OBSERVATIONS, GROUND NO. 5 I N THE APPEAL OF THE ASSESSEE IS DISPOSED OF. 13. GROUND NO. 6 BEING MERE PRAYER, DOES NOT REQU IRE ANY SEPARATE ADJUDICATION WHILE NO ADDITIONAL GROUND HAVING BEEN RAISED IN TERMS OF THE RESIDUARY GROUND, ACCORDINGLY, THESE GROUNDS ARE DISMISSED. 14. IN THE RESULT, APPEAL IS PARTLY ALLOWED, BUT FO R STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT TODAY ON 15-10-2010 (MAHAVIR SINGH) JUDICIAL MEMBER (A N PAHUJA) ACCOUNTANT MEMBER DATED : 15-10-2010 COPY OF THE ORDER FORWARDED TO: 1. SHRI JAYSUKH RATILAL PATEL, AT RAMPORE, PO SUKES H, TAL: KILLA PARDI 396 125 2. ACIT, VAPI CIRCLE, VAPI 3. CIT CONCERNED 4. CIT(A), VALSAD 5. DR, BENCH-C, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER DEPUTY REGISTRAR ASSISTANT REGISTRAR ITAT, AHMEDABAD