SHILPA SAMEER, Jaipur V. ITO, Jaipur

ITA 818/JPR/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 0544 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 14-09-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: JAI SINGH JCIT DHK
• Assessee Lawyers: DIKSHANT SOGANI
• Keywords: Salary income; Retrospective amendment
• Section: 143(3); 10(14); 15

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO ] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA-@ ITA NO. 818/JP/2016 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2011-12 SMT. SHILPA SAMEER, W/O- SHRI SAMEER SORAL, T-409, RANGOLI GARDEN, KANAKPURA, IN FRONT OF GANDHI PATH, VAISHALI NAGAR, JAIPUR. CUKE VS. INCOME TAX OFFICER, WARD- 6(4), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: ALYPS 5085 Q VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI DIKSHANT SOGANI (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI JAI SINGH (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 13/09/2018 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 14/09/2018 VKNS'K@ ORDER PER: VIJAY PAL RAO, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 23/06/2016 OF LD. CIT(A)-2, JAIPUR FOR THE A.Y. 201 1-12. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THE IMPUGNED ORDER OF THE LD CIT(A) PASSED IN T HE MATTER SHOULD BE QUASHED AND SET ASIDE. 2. THE COMPLETE DEDUCTION OF RS. 57,000/- ON ACCOUN T OF MEDICAL ALLOWANCE SHALL BE ALLOWED AND RELIEF SHOULD BE GRA NTED. 3. THE TOTAL DEDUCTION OF RS. 79,613/- ON ACCOUNT O F SUMPTUARY ALLOWANCE SHALL BE ALLOWED AND RELIEF SHOULD BE GRA NTED. ITA 818/JP/2016_ SHILPA SAMEER VS ITO 2 4. THE DEDUCTION OF RS. 18,240/- ON ACCOUNT OF CONV EYANCE ALLOWANCE SHALL BE ALLOWED AND RELIEF SHOULD BE GRANTED. 2. THE ASSESSEE IS A MEMBER OF RAJASTHAN HIGHER JUDI CIAL SERVICES AND WORKING AS AN A.D.J.. DURING THE COURSE OF ASSESSMEN T PROCEEDINGS, THE ASSESSING OFFICER HAS NOTED THAT THE ASSESSEE HAS R ECEIVED VARIOUS ALLOWANCES APART FROM SALARY, WHICH WERE CLAIMED AS EX EMPT FROM TAX. THE DETAILS OF THE ALLOWANCES RECEIVED BY THE ASSESSE E AND CLAIMED AS EXEMPT ARE AS UNDER: A) RESIDENTIAL OFFICE ALLOWANCES 3000.00 B) CONVEYANCE ALLOWANCE 9600.00 C) SUMPTUARY ALLOWANCES 79613.00 D) MEDICAL ALLOWANCES 75000.00 149213.00 THE ASSESSING OFFICER HAS ALLOWED THE DEDUCTION TO TH E EXTENT OF RS. 24,600/- AND CONSEQUENTLY MADE ADDITION OF RS. 1,24 ,613/- ON ACCOUNT OF CONVEYANCE ALLOWANCE, MEDICAL ALLOWANCE, RESIDENTIAL OFFICE ALLOWANCE, AND SUMPTUARY ALLOWANCE. 3. THE ASSESSEE CHALLENGED THE ACTION OF THE ASSESSI NG OFFICER BEFORE THE LD. CIT(A) BUT COULD NOT SUCCEED. 4. WE HAVE HEARD THE LD. AR AS WELL AS THE LD DR AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. IT WAS BROUGHT TO OUR N OTICE THAT THIS TRIBUNAL IN THE CASE OF AJAY GODARA VS ITO IN ITA NO. 614/JP /2016 VIDE ORDER DATED 19/06/2018 HAS CONSIDERED IDENTICAL ISSUES. W E FIND THAT THIS ITA 818/JP/2016_ SHILPA SAMEER VS ITO 3 TRIBUNAL IN THE CASE OF SHRI AJAY GODARA VS ITO (SUP RA) HAS CONSIDERED AND DECIDED SOME OF THESE ISSUES IN PARA 5 TO 19 AS UNDER: 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WEL L AS THE RELEVANT MATERIAL ON RECORD. THE LEARNED COUNSEL FOR THE ASS ESSEE HAS PLACED RELIANCE ON THE RECOMMENDATION OF THE SHETTY COMMIS SION AND SUBMITTED THAT AS PER THE RECOMMENDATION OF THE SHE TTY COMMISSION, THE HRA RECEIVED BY THE JUDICIAL OFFICER IS EXEMPT FROM TAX. HOWEVER, WE FIND THAT THIS ISSUE OF ENTITLEMENT OF JUDICIAL OFF ICIAL OF SALARY AND ALLOWANCES AS PER THE RECOMMENDATION OF THE SHETTY COMMISSION WAS CONSIDERED BY THE HONBLE SUPREME COURT IN CASE OF ALL INDIA JUDGES ASSOCIATION & ORS. VS. UNION OF INDIA & ORS 2002(2 ) SCR 712 AND HELD AS UNDER:- ONE OF THE RECOMMENDATIONS OF THE SHETTY COMMISSI ON IS IN RELATION TO THE GRANT OF THE HOUSE RENT ALLOWANCE. THE RECOM MENDATION IS THAT OFFICIAL ACCOMMODATION SHOULD BE MADE VAILABLE TO T HE MEMBERS OF THE JUDICIAL SERVICE WHO SHOULD PAY 12.5% OF THE SA LARY AS RENT. THE COMMISSION FURTHER RECOMMENDS THAT IN ADDITION TO T HE ALLOTMENT OF THE SAID PREMISES, THE JUDICIAL OFFICER SHOULD ALSO GET HOUSE RENT ALLOWANCE. IN OUR OPINION, THIS DOUBLE BENEFIT IS U NCALLED FOR. IT IS MOST DESIRABLE AND IMPERATIVE THAT FREE GOVERNMENT ACCOMMODATION SHOULD BE MADE AVAILABLE TO THE JUDICIAL OFFICERS. TAKING INCOME CONSIDERATION, THE FACT THAT THE ACCOMMODATION WHIC H IS MADE AVAILABLE TO THE JUDGES OF THE SUPREME COURT AS WE LL AS THE HIGH COURTS IS FREE OF CHARGE, WE DIRECT THAT THE OFFICI AL ACCOMMODATION WHICH IS ALLOTTED TO THE JUDICIAL OFFICERS SHOULD L IKEWISE BE FREE OF CHARGE BUT NO HOUSE RENT ALLOWANCE WILL BE PAYABLE ON SUCH AN ALLOTMENT BEING MADE. IF, HOWEVER, THE GOVERNMENT F OR ANY REASONS IS UNABLE TO MAKE ALLOTMENT, OR MAKE AVAILABLE OFFI CIAL ACCOMMODATION, THEN IN THAT EVENT THE JUDICIAL OFFI CER WOULD BE ENTITLED TO GET HOUSE RENT ALLOWANCE SIMILAR TO THA T WHICH HAS BEEN AS EXISTING OR AS DIRECTED BY THE SHETTY COMMISSION WH ICHEVER IS HIGHER. HOWEVER, IT IS MADE CLEAR THAT ONCE A GOVERNMENT OR OFFICIAL ACCOMMODATION IS ALLOTTED TO AN OFFICER AND IN PURS UANCE THEREOF HE OCCUPIES SUCH AN ACCOMMODATION, HE WOULD NOT BE ENT ITLED TO DRAW HOUSE RENT ALLOWANCE. ITA 818/JP/2016_ SHILPA SAMEER VS ITO 4 THUS, THE HONBLE SUPREME COURT HAS DECLINED TO ACC EPT THE RECOMMENDATION OF THE SHETTY COMMISSION FOR PAYMENT OF HOUSE RENT ALLOWANCE OVER AND ABOVE THE OFFICIAL ACCOMMODATION PROVIDED TO THE JUDICIAL OFFICER. THEREFORE, THE HONBLE SUPREME CO URT HAS HELD THAT THE JUDICIAL OFFICERS ARE ENTITLED FOR HOUSE RENT ALLOW ANCE ONLY WHEN THE GOVERNMENT, FOR ANY REASON, IS NOT ABLE TO MAKE ALL OTMENT OR MAKE AVAILABLE OFFICIAL ACCOMMODATION. THUS AS PER THE J UDGMENT OF HONBLE SUPREME COURT THE JUDICIAL OFFICERS ARE ENTITLED FO R THE HOUSE RENT ALLOWANCE AT PAR WITH THE OTHER GOVERNMENT OFFICIAL S AND EVEN EQUAL TO THE JUDGES OF HONBLE HIGH COURTS SUBJECT TO THE QU ANTUM OF ALLOWANCE VARIES FROM CASE TO CASE DEPENDING UPON THE PERCEN TAGE OF SALARY. THOUGH THE HOUSE RENT ALLOWANCE IS EXEMPT FROM TAX AS PER PROVISIONS OF HIGH COURTS JUDGES (SALARIES AND CONDITIONS OF SER VICE) ACT, 1954 AS WELL AS SUPREME COURT JUDGES (SALARIES AND CONDITIONS OF SERVICE) ACT, 1958 HOWEVER, THE PAYMENT OF HRA TO THE JUDICIAL OFFICER IS NOT GOVERNED BY THE PROVISIONS OF THESE ACTS. SECTION 22D OF HIGH C OURT JUDGES ( SALARIES AND CONDITIONS OF SERVICE) ACT 1954 AND SECTION 23D OF SUPREME COURT JUDGES (SALARIES AND CONDITIONS OF SERVICE) ACT 195 8 ARE PARI MATERIAL. FOR SHAKE OF READY REFERENCE SECTION 23D OF SUPREME COURT JUDGES (SALARIES AND CONDITIONS OF SERVICE) ACT 1958 IS QU OTED AS UNDER:- 23D. NOTWITHSTANDING ANYTHING CONTAINED IN THE INC OME-TAX ACT, 1961( 43 OF 1961),- (A) THE VALUE OF RENT-FREE OFFICIAL RESIDENCE PROV IDED TO A JUDGE UNDER SUB-SECTION (1) OF SECTION 23 OR THE ALLOWANCE PAID TO HIM UNDER SUB- SECTION (1A) OF THAT SECTION; (B) THE VALUE OF THE CONVEYANCE FACILITIES PROVIDE D TO A JUDGE UNDER SECTION 23A; (C) THE SUMPTUARY ALLOWANCE PROVIDED TO A JUDGE UN DER SECTION 23B; (D) THE VALUE OF LEAVE TRAVEL CONCESSION PROVIDED TO A JUDGE AND MEMBERS OF HIS FAMILY, ITA 818/JP/2016_ SHILPA SAMEER VS ITO 5 SHALL NOT BE INCLUDED IN THE COMPUTATION OF HIS IN COME CHARGEABLE UNDER THE HEAD SALARIES UNDER SECTION 15 OF THE I NCOME-TAX ACT, 1961. THUS, IT IS CLEAR THAT THE VALUE OF RENT FREE OFFIC IAL RESIDENCE PROVIDED TO A JUDGE OR THE ALLOWANCE PAID TO HIM UNDER SUB-SECTIO N (1A) OF SECTION 23 IS EXCLUDED IS EXEMPT FROM LIABILITY TO PAY INCOME TAX. THE PROVISIONS OF HIGH COURT JUDGES (SALARIES AND CONDITIONS OF SERVI CE) ACT 1954 AND AS WELL AS THE HONBLE SUPREME COURT JUDGES (SALARIES AND CONDITIONS OF SERVICE) ACT 1958 ARE APPLICABLE ONLY IN RESPECT OF THE JUDGES OF HONBLE HIGH COURTS AND HONBLE SUPREME COURT. THE JUDICIAL OFFICERS GOVERNMENT BY THE SERVICE CONDITIONS OF THE STATE H IGHER JUDICIARY CANNOT CLAIM THE BENEFIT OF HIGH COURTS JUDGES (SALARIES A ND CONDITIONS OF SERVICE) ACT 1954 AS WELL AS THE SUPREME COURT JUDG ES (SALARIES AND CONDITIONS OF SERVICE) ACT 1958. THEREFORE, THE HRA DRAWN BY THE JUDICIAL OFFICER OF STATE HIGHER JUDICIARY IS EXEMPT ONLY TO THE EXTENT OF THE PROVISIONS OF SECTION 10(13A) R.W.R. 2A OF THE INCO ME TAX RULES. THE LD. CIT(A) HAS CONSIDERED THIS ISSUE IN PARA (IV) AS UN DER:- (IV) I HAVE GONE THROUGH THE ABOVE SUBMISSION OF THE APPELLANT AND FOUND IT NOT BE CONVINCING AT ALL. IN THE ABOVE REF ERRED CASE, THE HON'BLE APEX COURT HAS DIRECTED THE GOVERNMENTS TO PROVIDE RESIDENTIAL ACCOMMODATION TO THE JUDICIAL OFFICERS AND IN CASE OF NON-AVAILABILITY, HRA IS TO BE PROVIDED. NOWHERE, I T IS STATED THAT THE HRA WOULD BE EXEMPT FROM INCOME TAX. IT MA Y BE MENTIONED THAT THE HRA IS EXEMPT U/S 10(13A) OF THE ACT AND THE METHOD OF COMPUTATION OF EXEMPT HRA IS PROVIDED IN RULE 2A OF THE IT RULES AND THE AMOUNT OF HRA WHICH IS E XEMPT FROM INCOME TAX IS TO BE COMPUTED ACCORDING TO RULE 2A. THE APPELLANT HAS NOT BEEN ABLE TO DRAW MY ATTENTION TO WARDS ANY PROVISION OF THE IT ACT WHICH GRANT EXEMPTION ON AC COUNT OF HRA TO JUDICIAL OFFICERS. IT IS THEREFORE, HELD THA T THE AO WAS JUSTIFIED IN MAKING ADDITION OF RS. 1,20,760/- ON A CCOUNT OF HRA WHICH WAS CLAIMED BY THE APPELLANT AS EXEMPT. THUS, IN VIEW OF THE ABOVE DISCUSSION, WE DO NOT FI ND ANY ERROR OR ILLEGALITY IN THE IMPUGNED ORDER OF THE LD. CIT(A) QUA THIS ISSUE. ITA 818/JP/2016_ SHILPA SAMEER VS ITO 6 6. MEDICAL ALLOWANCE :- THE LEARNED COUNSEL FOR THE ASSESSEE HAS SUBMITT ED THAT AS PER THE PROVISIONS OF SECTION 17 AND SECTIO N 80D THE AMOUNT NOT EXCEEDING RS. 15,000/- IN A YEAR IS EXEMPT. THUS, T HE LD. AR HAS SUBMITTED THAT THE HONBLE SUPREME COURT IN ITS JUD GMENT DATED 21.03.2002 HAS ACCEPTED THE RECOMMENDATION OF THE S HETTY COMMISSION FOR MEDICAL ALLOWANCE WHICH IS GIVEN IN ADDITION TO THE OTHER MEDICAL BENEFIT AS REIMBURSEMENT TO PAY CERTAIN AMOUNTS EVE RY MONTHS TO MEET ORDINARY DAY TO DAY MEDICAL NEEDS. IN CASE OF SMT. SHIPA SAMEER THE JUDICIAL OFFICER THE ASSESSING OFFICER WHILE PASSI NG THE ASSESSMENT U/S 143(3) OF THE ACT DATED 30.09.2013 HAS ALLOWED THE MEDICAL ALLOWANCE AS EXEMPT TO THE EXTENT OF RS. 15,000/-. THE LD. AR HAS FILED A COPY OF THE ASSESSMENT ORDER DATED 30.09.2013. 7. ON THE OTHER HAND, THE LD. DR HAS SUBMITTED THAT THERE IS NO PROVISIONS IN THE INCOME TAX ACT TO EXCLUDE THE MEDICAL ALLOWANCE FROM PREREQUISITE AND ONLY DEDUCTION IS PROVIDED FOR REIMBURSEMENT OF MEDICAL EXPENSES. FURTHER, THE RECOMMENDATION AS ACCEPTED BY THE HON BLE SUPREME COURT IS ONLY FOR MEDICAL ALLOWANCE OF RS. 100 PER MONTH. SHE HAS RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS THE RELEVANT MATERIAL ON RECORD. IN VIEW OF THE ASSESSMENT ORDER IN CASE OF SMT. SHILPA SAMEER, WE DIRECT THE AO TO RECONSIDER THIS ISSUE O F ALLOWING THE CLAIM OF EXEMPTION OF MEDICAL ALLOWANCE TO THE EXTENT OF RS. 15,000/-. IF THE ASSESSMENT ORDER IN CASE OF SMT. SHILPA SAMEER IS N OT DISTURBED TILL DATE THEN THE CLAIM OF THE ASSESSEE SHALL ALSO BE ALLOWE D TO THE EXTENT OF RS. 15,000/-. 9. SUMPTUARY ALLOWANCE :- THE LEARNED COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE SUMPTUARY ALLOWANCE PAID TO THE JUDICIAL OFFICER IS EXCLUDED FROM THE INCOME AS IT IS IN THE NATURE OF ENTERTAINMENT ITA 818/JP/2016_ SHILPA SAMEER VS ITO 7 ALLOWANCE AND NOT AN INCOME OF THE ASSESSEE. HE HAS FURTHER CONTENDED THAT THIS ALLOWANCE IS PAID ONLY TO MEET THE EXPENS ES TO BE INCURRED BY THE JUDICIAL OFFICER ON ACCOUNT OF ENTERTAINMENT. H E HAS REFERRED TO THE CBDT CIRCULAR NO. 35/32/66-IT(B), DATED 24-9-1966 A ND SUBMITTED THAT THE CBDT HAS CLARIFIED THAT THE SUMPTUARY ALLOWANCE RECEIVED BY A PERSONS WHO IS IN RECEIPT OF SALARY FROM THE GOVERN MENT IS REQUIRED TO BE DEDUCTED IN COMPUTING THE INCOME CHARGEABLE UNDER T HE HEAD SALARIES. THUS, THE LEARNED COUNSEL FOR THE ASSESSEE HAS SUBM ITTED THAT THIS AMOUNT CANNOT BE INCLUDED IN THE SALARY OF THE ASSE SSEE FOR THE PURPOSE OF INCOME TAX. 10. ON THE OTHER HAND, THE LD DR HAS RELIED UPON TH E ORDERS OF THE AUTHORITIES BELOW. 11. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WEL L AS THE RELEVANT MATERIAL ON RECORD. THE LD. CIT(A) HAS REJECTED THE CLAIM OF THE ASSESSEE ON THE GROUND THAT THE ASSESSEE HAS NOT BROUGHT ON RECORD ANY SECTION, NOTIFICATION, CIRCULAR ETC. AS ISSUED BY THE CBDT. WE FIND THAT THE CBDT VIDE LETTER NO. 35/32/66-IT(B), DATED 24-9-1966 HAS MADE IT CLEAR THAT SUMPTUARY ALLOWANCE HAS TO BE TREATED AS AN ENTERTA INMENT ALLOWANCE AND ACCORDINGLY, THE SAID ALLOWANCE RECEIVED BY A P ERSON WHO IS IN RECEIPT OF SALARY FROM THE GOVERNMENT, TO THE EXTEN T OF SUCH ALLOWANCE ARE REQUIRED TO BE DEDUCTED IN COMPUTING THE INCOME CHARGEABLE UNDER HEAD SALARIES U/S 16(II)(A) THUS, THE CBDT CIRCULAR HAS CLARIFIED THAT THIS ALLOWANCE MAY BE REGARDED AS ENTERTAINMENT ALLOWANC E AND EXEMPT FROM PAYMENT OF INCOME TAX. FOR READY REFERENCE WE REPRODUCED THE SAID LETTER OF CBDT AS UNDER:- SECTION 17 OF THE INCOME TAX ACT, 1961- SALARY PE RQUISITE AND PROFITS IN LIEU OF SALARY- SUMPTUARY ALLOWANCE BEIN G IN THE NATURE OF ENTERTAINMENT ALLOWANCE NOT TO BE INCLUDED IN TERM SALARY FOR THE PURPOSE OF DETERMINING PERQUISITE VALUE OF RESIDENT IAL ACCOMMODATION UNDER RULE 3(A) OF INCOME TAX RULES. ITA 818/JP/2016_ SHILPA SAMEER VS ITO 8 LETTER F. NO. 35-32/66-IT(B), DATED 24-9-1966 ACCORDING TO THE BOARD'S INSTRUCTION 'SUMPTUARY AL LOWANCE' HAS TO BE TREATED AS AN ENTERTAINMENT ALLOWANCE. IN VIEW O F THIS, THE SUMPTUARY ALLOWANCE RECEIVED BY A PERSON, WHO IS IN RECEIPT OF SALARY FROM THE GOVERNMENT, TO THE EXTENT THAT SUCH ALLOWANCE IS REQUIRED TO BE DEDUCTED IN COMPUTING THE INCOME CHA RGEABLE UNDER THE HEAD 'SALARIES' UNDER SECTION 16(II)(A), MAY BE REGARDED AS AN ALLOWANCE EXEMPTED FROM PAYMENT OF I NCOME-TAX. ALLOWANCE IN THE NATURE OF ENTERTAINMENT ALLOWANCE, TO THE EXTENT SUCH ALLOWANCE IS DEDUCTIBLE UNDER CLAUSE (II) OF S ECTION 16 IS EXCLUDED FROM THE TERM 'SALARY' UNDER EXPLANATION ( 2)(IV) [AS IT STOOD BEFORE THE AMENDMENT MADE BY THE INCOME-TAX (AMENDMENT) RULES, 1974], TO RULE 3(A) OF THE INCOM E-TAX RULES, AND, THEREFORE, SUMPTUARY ALLOWANCE MAY NOT BE INCL UDED IN THE TERM 'SALARY' FOR THE PURPOSES OF SAID RULE. IN VIEW OF THE ABOVE CBDT CLARIFICATION WE HOLD TH AT THE SUMPTUARY ALLOWANCE IS EXEMPT FROM PAYMENT OF INCOME TAX AND ACCORDINGLY TO BE EXCLUDED AS A DEDUCTION WHILE COMPUTING INCOME UNDE R THE HEAD SALARY. 12. RESIDENCE OFFICE ALLOWANCE :- THE ASSESSEE RECEIVED RESIDENCE OFFICE ALLOWANCE OF RS. 3,000/- WHICH WAS CLAIMED AS EXEMP T FROM TAX. THE AO HAS ADDED THE SAID AMOUNT TO THE INCOME OF THE ASSE SSEE. THE LD. CIT(A) HAS CONFIRMED THE ADDITION MADE BY THE AO. 13. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THIS ALLOWANCE IS PAID TO THE JUDICIAL OFFICER ON ACCOUN T OF THE EXPENDITURE INCURRED IN MAINTAINING THE RESIDENCE OFFICE AND TH EREFORE, THE SAME CANNOT BE TREATED AS INCOME OF THE ASSESSEE. 14. ON THE OTHER HAND, THE LD. DR HAS RELIED UPON T HE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THERE IS NO PR OVISION IN THE INCOME- TAX ACT TO EXEMPT THE SAID ALLOWANCE FROM TAX. 15. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WEL L AS THE RELEVANT MATERIAL ON RECORD. AT THE OUTSET, WE NOTE THAT RES IDENCE OFFICE ITA 818/JP/2016_ SHILPA SAMEER VS ITO 9 ALLOWANCE OF RS. 3,000/- RECEIVED BY THE ASSESSEE I S ON ACCOUNT OF MINIMUM DAY TO DAY EXPENSES INCURRED BY THE ASSESSE E FOR KEEPING THE RESIDENCE OFFICE FUNCTIONAL. THEREFORE, THE EXPENSE S INCURRED ON ACCOUNT OF OFFICIAL WORK WHICH IS REIMBURSED BY THE GOVERNM ENT IN THE SHAPE OF ALLOWANCE CANNOT BE TREATED AS INCOME OF THE ASSESS EE. IN OUR VIEW THE ALLOWANCE IS PAID TO THE JUDICIAL OFFICER TO AVOID THE FURNISHING ACCOUNTS OF PETTY EXPENSES BY THE JUDICIAL OFFICER FOR REIMB URSEMENT. THUS, TO AVOID THE PRODUCTION OR FURNISHING OF ACCOUNT OF PE TTY EXPENSES IN RESPECT OF RESIDENCE OFFICE, THE ALLOWANCE IS PAID IN LIEU OF REIMBURSEMENT OF SUCH PETTY EXPENSES. ACCORDINGLY, THE RESIDENCE OFFICE ALLOWANCE CANNOT BE TREATED AS INCOME OF THE ASSESS EE AND THE SAME HAS TO BE EXCLUDED FROM THE SALARY INCOME. 16. LEAVE ENCASHMENT:- THE ASSESSEE HAS RECEIVED A SUM OF RS. 51,983/- ON ACCOUNT OF LEAVE ENCASHMENT WHICH WERE CLAIMED AS EXEMPT FROM TAX. THE AO ADDED THE SAID AMOUNT TO THE TOTAL INCOME OF THE ASSESSEE. THE LD. CIT(A) HAS ALSO CONFIRMED THE ADDITION MADE BY THE AO. 17. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE HAS SUBMITTED THE HONBLE SUPREME COURT IN DECISION DATED 07.02.2006 HAS ACCEPTED ENCASHMENT OF LEAVE AND LEAVE SALARY OF JUDICIAL O FFICER AS TAX FREE. HE HAS FURTHER CONTENDED THAT THOUGH SUBSEQUENTLY THER E IS NOTIFICATION BY THE GOVERNMENT OF ODISHA DATED 25.06.2013 WHEREBY T HE ENCASHMENT OF LEAVE ADMISSIBLE TO JUDICIAL OFFICER IS MADE TAXABL E. THE LD. AR HAS THUS SUBMITTED THAT THE SAID NOTIFICATION DATED 25.06.20 13 CANNOT BE APPLIED RETROSPECTIVE, THEREFORE, LEAVE ENCASHMENT FOR THE YEAR UNDER CONSIDERATION IS TAX FREE. THUS, THE LD. AR HAS SUB MITTED THAT ENCASHMENT OF EARNED LEAVE HAS BEEN DECLARED TAX FREE BY THE H ONBLE SUPREME COURT WHICH BINDING TILL THE NOTIFICATION DATED 25.06.201 3. ITA 818/JP/2016_ SHILPA SAMEER VS ITO 10 18. ON THE OTHER HAND, THE LD. DR HAS SUBMITTED THA T AS PER THE PROVISIONS OF SECTION 10(10AA)(I) OF THE ACT THE LEAVE ENCASHMENT IS EXEMPT AT THE TIME OF SUPERANNUATION AND NOT DURING THE SERVICE P ERIOD. SHE HAS RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 19. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WEL L AS THE RELEVANT MATERIAL ON RECORD. THOUGH THERE IS NO PROVISIONS U NDER THE INCOME TAX ACT TO EXEMPT THE LEAVE ENCASHMENT FROM TAX DURING THE SERVICE OF GOVERNMENT EMPLOYEE EXCEPT THE PROVISIONS OF SECTIO N 10(10AA)(I) OF THE ACT APPLICABLE AT THE TIME OF SUPERANNUATION. THERE IS A NOTIFICATION OF GOVERNMENT OF ODISHA GAZETTE DATED 25.06.2013 WHICH READS AS UNDER:- IN PURSUANCE OF GOVERNMENT OF INDIA, MINISTRY OF L AW AND JUSTICE (DEPARTMENT OF JUSTICE), NEW DELHI IN THEIR LETTER NO. 19018/03/2012-JUS, DATED 19 TH FEBRUARY, 2013 AND DIRECTION OF HONBLE SUPREME COURT, THE STATE GOVERNMENT AFTER C AREFUL CONSIDERATION HAVE DECIDED THAT THE ENCASHMENT OF L EAVE ADMISSIBLE TO JUDICIAL OFFICERS IN THE STATE SHALL CONTINUE TO BE SUBJECT TO APPLICABLE TAXES. THIS DEPARTMENT EARLIER RESOLUTION NO. 9033/L., DA TED THE 17 TH AUGUST, 2010 MODIFIED ACCORDINGLY. THIS HAS BEEN CONCURRED IN BY FINANCE DEPARTMENT V IDE THEIR U.O.R. NO. 41 CS-II, DATED THE 30 TH MAY, 2013. THEREFORE, VIDE THIS NOTIFICATION THE GOVERNMENT OF ODISHA AFTER CONSULTING THE MINISTRY OF LAW AND JUSTICE GOVERNME NT OF INDIA HAS DECIDED THAT ENCASHMENT OF LEAVE ADMISSIBLE TO JUDI CIAL OFFICER IN STATE SHALL CONTINUE TO SUBJECT TO APPLICABLE TAXES. THE LANGUAGE OF THE SAID GAZETTE NOTIFICATION SHOWS THAT THE EARLIER RESOLUT ION DATED 17.08.2010 WAS MODIFIED VIDE THIS GAZETTE NOTIFICATION DATED 2 5.06.2013. THEREFORE, THE SAID NOTIFICATION CANNOT BE APPLIED TO THE ASSE SSEE BEFORE US WITH RETROSPECTIVE EFFECT. THE HONBLE SUPREME COURT VI DE DECISION DATED 07.02.2006 HAS REPRODUCED THE RECOMMENDATION OF THE SHETTY COMMISSION AS ENUMERATED FROM SERIAL NO. 1 TO 16 AN D AT SERIAL NO. 12 ITA 818/JP/2016_ SHILPA SAMEER VS ITO 11 THE RECOMMENDATION REGARDING ENCASHMENT OF LEAVE AN D LEAVE SALARY IS REPRODUCED AS UNDER:- (12) ENCASHMENT OF LEAVE AND LEAVE SALARY (JUDICIAL OFFICERS TO BE ALLOTTED TO ENCASH LEAVE NOT EXCEEDING ONE MONTH IN A BLOCK OF TWO YEARS --- AND TAX FREE) THEREAFTER, VIDE JUDGMENT DATED 21.03.2002 IN CASE OF ALL INDIA JUDGES ASSOCIATION & ORS. VS. UNION OF INDIA AND ORS. REPO RTED IN 2002(2) SCR 712 SUBJECT TO THE MODIFICATION ALL THE RECOMMENDAT IONS OF THE SHETTY COMMISSION WERE ACCEPTED. THE RECOMMENDATION FOR LE AVE ENCASHMENT AND LEAVE SALARY WAS NOT MODIFIED BY THE HONBLE SU PREME COURT BUT WAS ACCEPTED AS RECOMMENDED BY THE SHETTY COMMISSION. T HEREFORE, IN VIEW OF THE FACT THAT THE LEAVE ENCASHMENT WAS RECOMMEND ED AS TAX FREE AND ACCEPTED BY THE HONBLE SUPREME COURT PRIOR TO THE NOTIFICATION DATED 25.06. 2013 THE LEAVE ENCASHMENT WOULD BE TAX FREE. IN THE CASE IN HAND, THE ISSUE OF HOUSE RENT ALLOWAN CE IS NOT INVOLVED BUT THE DEDUCTION OF CONVEYANCE ALLOWANCE WAS CLAIMED BY THE ASSESSEE, WHICH WAS DENIED BY THE ASSESSING OFFICER AS WELL AS B Y THE LD. CIT(A). IT IS PERTINENT TO NOTE THAT THE CONVEYANCE ALLOWANCE R ECEIVED BY THE ASSESSEE IS IN LIEU OF THE OFFICIAL VEHICLE AND THE REFORE, THE PROVISIONS OF SECTION 10(14) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) READ WITH RULE 2BB OF THE INCOME TAX RULES, 1962 (IN SHORT THE RULES) WOULD BE APPLICABLE ON SUCH ALLOWANCES. HENCE, THE FINDINGS O F THE TRIBUNAL IN THE CASE OF SHRI AJAY GODARA VS. ITO (SUPRA) IN RESPECT OF THE HOUSE RENT ALLOWANCE WOULD BE APPLICABLE ON THE ISSUE OF CONVEYA NCE ALLOWANCE. ITA 818/JP/2016_ SHILPA SAMEER VS ITO 12 5. AS REGARD THE OTHER ISSUES, THIS TRIBUNAL IN THE CASE OF AJAY GODARA VS. ITO (SUPRA) HAS DECIDED IN FAVOUR OF THE ASSESS EE AS THE OTHER ALLOWANCES CANNOT BE CONSIDERED AS PART OF THE SALAR Y OR PREREQUISITE AND THEREFORE, THE SAME ARE EXEMPT FROM TAX. ACCORDINGL Y, EXCEPT THE CONVEYANCE ALLOWANCE, WHICH IS EXEMPT ONLY TO THE EXT ENT OF THE QUANTUM TO BE COMPUTED AS PER THE PROVISIONS OF SECTION 10( 14) OF THE ACT READ WITH RULE 2BB OF THE RULES, WHICH HAS BEEN RIGHTLY AL LOWED BY THE ASSESSING OFFICER AS PER THE PROVISIONS OF THE ACT, ALL REMAINING DISALLOWANCES MADE BY THE ASSESSING OFFICER ON ACCOU NT OF MEDICAL ALLOWANCE, RESIDENTIAL OFFICE ALLOWANCE AND SUMPTUARY ALLOWANCE ARE DELETED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 14/09/2018. SD/- SD/- FOE FLAG ;KNO FOT; IKY JKO (VIKRAM SINGH YADAV) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 14 TH SEPTEMBER, 2018 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- SMT. SHILPA SAMEER, JAIPUR. 2. IZR;FKHZ @ THE RESPONDENT- THE ITO, WARD- 6(4), JAIPUR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) ITA 818/JP/2016_ SHILPA SAMEER VS ITO 13 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 818/JP/2016) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR