Sri B.Durga Prasada Rao, Ex.MLA, Hyderabad V. ITO, Gudur

ITA 830/HYD/2007

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 66342 (ITAT-HYDERABAD)
• Duration Of Justice: 5 year(s) 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2004-2005
• Appeal Filed On: 19-07-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MALLIKARJUN
• Keywords: Salary income; Competent authority; Benefit of exemption
• Section: 10(14); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NOS. 826, 827, 828, 829 & 830/HYD/2007 ASSESSMENT YEARS: 2000-01, 2001-02, 2002-03, 2003-0 4, AND 2004-05 SHRI B. DURGA PRASAD, EX-MLA, VENKATAGIRI, ... APPELLANT VS. INCOME TAX OFFICER, WARD 1, RESPONDENT GUDUR, NELLORE DT. APPELLANT BY : SHRI SAMUEL NAGADESI RESPONDENT BY : SHRI MALLIKARJUN DATE OF HEARING : 24/09/2012 DATE OF PRONOUNCEMENT : 28/0 9/2012 ORDER PER ASHA VIJAYARAGHAVAN, J.M.: ALL THESE APPEALS PERTAIN TO SAME ASSESSEE ARE DIR ECTED AGAINST A COMMON ORDER OF THE CIT(A), GUNTUR DATED 21/05/2007 FOR THE ASSESSMENT YEARS 2000-01 TO 2004-05. SINCE THE ISSU ES INVOLVED IN THESE APPEALS ARE IDENTICAL, THESE APPEALS WERE HEARD TOG ETHER AND, THEREFORE, THE SAME ARE BEING DISPOSED BY WAY OF CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. SINCE THE ISSUES INVOLVED IN THESE APPEALS ARE M ATERIALLY IDENTICAL, TO DISPOSE OF THESE APPEALS, WE REFER TO THE FACTS FROM AY 2000-01 BEING ITA NO. 826/HYD/2007. 3. THE ASSESSEE AN ELECTED MLA, DURING THE YEARS UN DER APPEAL, RECEIVED SALARY, CERTAIN ALLOWANCES, I.E., CONVEYAN CE ALLOWANCE, CONTINGENCY ALLOWANCE, MEDICAL ALLOWANCE TELEPHONE ALLOWANCE AND 2 ITA NOS. 826 TO 830/HYD/2007 SHRI B. DURGA PRASADA RAO CLERICAL ALLOWANCE. THE ASSESSING OFFICER U/S 143(3 ) READ WITH SECTION 147 HELD THAT THE ASSESSEE HAD NOT FULFILLED THE FOLLOW ING THREE CONDITIONS LAID DOWN IN THE PROVISIONS OF SECTION 10(14) FOR ALLOWI NG ANY ALLOWANCE TO BE EXEMPT: 1. ALLOWANCE SHOULD NOT BE IN THE NATURE OF PERQUIS ITE. 2. ALLOWANCE SHOULD HAVE BEEN GRANTED TO MEET EXPEN SES WHOLLY, NECESSARY AND EXCLUSIVELY IN THE PERFORMANCE OF DUT IES OF AN OFFICE OR EMPLOYMENT OF PROFIT AND 3. SUCH EXPENSES ARE ACTUALLY INCURRED FOR THE SPEC IFIED PURPOSE. II) HE FURTHER STATED THAT SECTION 10(14) WAS INTEN DED TO COVER ONLY THOSE ALLOWANCE GRANTED TO SALARIED EMPLOYEES BUT N OT OTHER CASES WHERE EMPLOYER EMPLOYEE RELATIONSHIP DOES NOT EXI ST BETWEEN THE PAYER AND PAYEE. III) HE FURTHER, OBSERVED THAT MLAS ARE ELECTED REP RESENTATIVES OF PEOPLE BUT NOT EMPLOYEES OF STATE GOVERNMENT. THERE IS NO EMPLOYER EMPLOYEE RELATIONSHIP BETWEEN THE MLA AN D GOVERNMENT. SALARY INCOME IN THE HANDS OF MLAS IS A SSESSABLE UNDER THE HEAD INCOME FROM OTHER SOURCES. HE WAS, THEREFORE, OF THE OPINION THAT THE ALLOWANCES GRANTED TO MLAS CAN NOT BE CONSIDERED AS ALLOWANCES FALLING UNDER THE SCOPE OF ALLOWANCE SPECIFIED IN SECTION 10(14) OF THE ACT. IV) IN RESPECT OF DECISION OF THE HONBLE ITAT, HYD ERABAD IN CASE OF SRI N. INDRASENAREDDY VS. ITO WHEREIN THE HONBLE I TAT CONCLUDED THAT IN ADDITION TO PROVISIONS OF SECTION 10(17)(II I), THE PROVISIONS OF SECTION 10(14)(I) WOULD ALSO BE APPLICABLE IN CASE OF AN MLA, THE ASSESSING OFFICER RESPECTFULLY SUBMITTED THAT BEFOR E THE HONBLE ITAT RELEVANT PROVISIONS OF OF THE AP PAYMENT OF S ALARIES AND PENSION AND REMOVAL OF DISQUALIFICATION ACT, 1953 W ERE NOT BROUGHT AND FURTHER STATED THAT MLAS ARE SPECIFICALLY PROHI BITED UNDER THE CONSTITUTION FROM HOLDING AN OFFICE. 3 ITA NOS. 826 TO 830/HYD/2007 SHRI B. DURGA PRASADA RAO V) HE FURTHER, OBSERVED THAT THERE IS NO ENFORCEABL E DUTY/OBLIGATION ATTACHED TO PLACE OR POSITION OF MLA THEREFORE SUCH PLACE OR POSITION OF MLA CANNOT BE CONSIDERED AS HOLDING OF AN OFFICE . ELECTION OF AN INDIVIDUAL AS AN MLA ONLY SHOWS THE CONFIDENCE REPO SED IN HIM/HER BY THE PUBLIC TO BE REPRESENTATIVE OF THEIR CONSTIT UENCY AND TO VOICE THEIR CONCERNS IN THE LEGISLATURE. BUT BY SUCH ELEC TION NO ENFORCEABLE DUTY/OBLIGATION IS CREATED BETWEEN PUBLIC AND MEMB ER ELECTED. AN OFFICE MUST HAVE CLEARLY DEFINED DUTIES AND AT THE SAME TIME ENOUGH POWERS/AUTHORITY TO CARRY OUT THE DUTIES STI PULATED. MEMBER OF LEGISLATIVE ASSEMBLY HAS NO CLEAR CUT DUTIES FOR WHICH HE OR SHE WILL BE HELD ACCOUNTABLE TO THE PUBLIC/GOVERNMENT. 4. THE ASSESSING OFFICER ALSO STATED THAT THE ASSES SEE HAD ALSO NOT FULFILLED 3 RD CONDITION REGARDING ACTUAL INCURRING OF EXPENDITUR E EXCEPT FILING ONE RECEIPT FOR CAR RENTAL CHARGES. NO EVIDE NCE HAVING INCURRED EXPENDITURE IN RESPECT OF OTHER ALLOWANCES WAS FILE D BY THE ASSESSEE. HE, THEREFORE, STATED THAT ALL THREE CONDITIONS LAID DO WN IN THE PROVISIONS OF SECTION 10(14) OF THE ACT ARE NOT SATISFIED BY THE ASSESSEE. 5. THE ASSESSING OFFICER FURTHER OBSERVED THAT WITH REGARD TO THE ALLOWANCES RECEIVED BY MLAS, A LUMP-SUM AMOUNT OF RS. 2,000/- PER MONTH IS PROVIDED IN THE PROVISIONS OF SECTION 19(1 7) OF THE ACT. SINCE, SPECIFIC SECTION DEALING WITH EXEMPTION OF THE ALLO WANCES GRANTED TO AN MLA IS AVAILABLE IN THE IT ACT, THEREFORE, PROVISIO NS OF ANOTHER SECTION 10(14), CANNOT BE APPLIED FOR THE SAME ALLOWANCES B Y TAKING NOTE OF PRINCIPLE OF INTERPRETATION THAT SPECIAL PROVISIONS MUST PREVAIL OVER GENERAL PROVISIONS. 6. THE ASSESSING OFFICER ALSO OBSERVED THAT SALARY AND ALLOWANCES RECEIVED BY AN MLA ARE ASSESSABLE UNDER THE HEAD I NCOME FROM OTHER SOURCES AND THEREFORE ANY EXPENDITURE FOR EARNING OF SUCH INCOME OR FOR 4 ITA NOS. 826 TO 830/HYD/2007 SHRI B. DURGA PRASADA RAO PURPOSE OF MAKING INCOME IF INCURRED WHOLLY AND EXC LUSIVELY IN ACCORDANCE TO THE PROVISIONS OF SECTION 57(III) ARE ALLOWABLE. HE NOTED THAT IN CASE OF MLAS, THEY ARE GETTING FIXED ALLOWANCES BARRING DAILY ALLOWANCE, TRAVELLING ALLOWANCES AND MEDICAL REIMBURSEMENT AND SINCE SUCH FIXED ALLOWANCES ARE NEITHER ENHANCED NOR REDUCED DEPENDI NG ON INCURRING OF ACTUAL EXPENDITURE BY THE ASSESSEE, THEREFORE THEY HAVE NO RELATION TO INCURRING THE ACTUAL EXPENDITURE. THE ASSESSING OFF ICER, THEREFORE, HELD THAT W.R.T. FIXED ALLOWANCES IT CANNOT BE SAID THAT SUCH ALLOWANCES ARE GRANTED AS A REIMBURSEMENT OF EXPENDITURE INCURRED IN DISCHARGE OF DUTIES/OBLIGATION AND ACCORDINGLY NO DEDUCTION U/S 57(III) IS ADMISSIBLE WITH REGARD TO THE EXPENSES INCURRED BY THE MLAS OU T OF THE FIXED ALLOWANCES ALREADY GRANTED BY THE RULES. FOR THE AB OVE CONCLUSION, HE RELIED UPON THE DECISION OF THE ITAT, BHOPAL IN CAS E OF JASWANT SINGH VS. ITO, ITAT 2005 (96) TTJ 660 WHEREIN THE HONBLE ITA T UPHELD ORDER THE CIT REJECTING CLAIM OF THE ASSESSEE FOR EXEMPTION O F THE SALARY AND ALLOWANCES RECEIVED AS AN MLA EITHER U/S 10(14) OR U/S 57. 7. AGAINST THE ABOVE FINDINGS GIVEN IN THE ASSESSME NT ORDERS FOR ASSESSMENT YEARS 2000-01 TO 2004-05, THE ASSESSEE F ILED APPEALS ON 312/01/2007 BEFORE THE CIT(A). 8. BEFORE THE CIT(A), THE LEARNED AR OF THE ASSESSE E CONTENDED THAT THE STATE GOVERNMENT BESIDES SALARY HAS GRANTED CER TAIN ALLOWANCES VIZ., TRAVELLING, TELEPHONE, SECURITY, CAR ALLOWANCES AND CLERICAL ALLOWANCES TO MEET THE EXPENDITURE WHICH AN MLA INCUR DURING PERF ORMANCE OF DUTIES AS AN ELECTED MLA. HE RELIED UPON THE DECISION OF THE ITAT, HYDERABAD IN THE CASE OF SRI N. INDRASENA REDDY VS. ITO IN ITA N O. 218, 219/HYD/2005 FOR ASSESSMENT YEARS 2000-01 & 2001-02. 9. THE CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE HELD AS FOLLOWS: 5 ITA NOS. 826 TO 830/HYD/2007 SHRI B. DURGA PRASADA RAO 6.1.......................HONBLE ITAT, HYDERABAD BENCH IN THE CASE OF INDRASENAREDDY VS. ITO, WARD -9(1), HYD. IN ITA N O. 218, 219/HYD/2005 FOR ASST. YEARS 2000-01 & 2001-02 DI SCUSSED IN DETAIL THE ISSUE WHETHER SECTION 10(14) APPLIES IN CASE OF MLA AND ALSO WHETHER BOTH SECTION 10(14) AND SECTION 10(17 ) WILL BE APPLICABLE SIMULTANEOUSLY. THE HONBLE MEMBERS AFT ER CONSIDERING THE DECISION OF HONBLE AP HIGH COURT IN CASE OF M ADDI SUDARSANAM, REPORTED IN 174 ITR PG. 659 HELD THAT MLA IS HOLDI NG AN OFFICE THOUGH NOT AN OFFICE OF PROFIT AND THE PROVISIONS OF SECTION 10(14) OF THE ACT WOULD APPLY. IT IS FURTHER OBSERVED THAT T HE EXPENSES WHICH ARE EXEMPT U/S 10(14) ARE REQUIRED TO BE PRESCRIBE D BY THE COMPETENT AUTHORITY AND ASSESSEE IS REQUIRED TO FI LE EVIDENCE TO SHOW THAT SUCH EXPENDITURE HAS ACTUALLY BEEN INCUR RED BY HIM AS PRESCRIBED IN RULE 2BB(1) OF THE IT RULES. THE HONBLE MEMBERS ON PAGE 6 AT PARA 6.1 OF THE O RDER FURTHER HELD THAT A COMBIED READING OF SUB-SECTION (I), (I I) AND (III) OF SECTION 10(17) WOULD MAKE IT CLEAR THAT THIS SECTI ON IS BROUGHT IN ONLY TO DEAL WITH CERTAIN SPECIAL ALLOWANCES OTHER THAN THE NORMAL ALLOWANCES WHICH ARE ALLOWED TO A MEMBER OF PARLIA MENT OR A MEMBER OF STATE LEGISLATIVE ASSEMBLY WHICH MAY BE COVERED BY OTHER SECTION OF THE ACT. IT IS ABSURD TO THINK AN ALLOWANCE OF RS. 2,000/- PER MONTH WILL ALSO INCLUDE HOUSE RENT ALL OWANCE, TRAVELLING AND CONVEYANCE ALLOWANCE ETC. IN THIS VIEW OF THE MATTER, THE HONBLE MEMBERS HELD THAT IN CASE OF MEMBER OF LEG ISLATIVE ASSEMBLY OF THE STATE BOTH SECTION 10(14)(I) AND S ECTION 10(17)(III) BE APPLICABLE. 6.2 FROM THE ABOVE FINDING OF THE HONBLE ITAT, HYD RABAD BENCH- B, HYD, IT WOULD BE CLEAR THAT THE HONBLE ITAT HA S ALREADY DECIDED THAT IN CASE OF MLA IN RESPECT OF ALLOWANC ES PROVISIONS OF SEC.10(14(I) AND ALSO SEC. 10(17(III) ARE APPLI CABLE. I THEREFORE, FOLLOWING RESPECTFULLY THE DECISION OF THE HONBLE ITAT, HYDERABAD ALLOW GROUNDS OF APPEAL OF THE APPELLANT TO THE EXTENT THAT IN HIS CASE PROVISIONS OF SEC.10(14)(I) AND A LSO SEC. 10(17(III) ARE APPLICABLE. HOWEVER, AS DISCUSSED BY THE AO TH AT THE APPELLANT DID NOT PRODUCE DOCUMENTARY EVIDENCE EXC EPT FILING OF A CERTIFICATE FOR RENTAL CHARGES IN RESPECT OF ANY OTHER ALLOWANCES. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE AP PELLANTS COUNSEL WAS ASKED TO EXPLAIN WHETHER THE APPELLANT HAD BEEN MAINTAINING DAY TO DAY RECORD WITH NATURE OF EXPEN DITURE, NAME AND ADDRESS OF PAYEE, AMOUNT, AND PURPOSE OF EXPEN DITURE, RELATION WITH EARNING OF INCOME AND NECESSITY TO I NCUR EXPENDITURE IN RELATION TO DUTIES OF MLA ETC. HE S TATED THAT THE DAY TO DAY ACCOUNTS ARE NOT MAINTAINED BY THE APPELLANT IN RESPECT OF 6 ITA NOS. 826 TO 830/HYD/2007 SHRI B. DURGA PRASADA RAO ALL THE ALLOWANCES RECEIVED IN THE ACCOUNTING YEARS RELEVANT TO ASST. YEARS UNDER APPEAL. THE PROVISION OF SECTION 10(14 ) R.W. RULE 2BB(1) CLEARLY PROVIDES THAT THE EXEMPTION IS IN RESPECT OF PRESCRIBED SPECIAL ALLOWANCE FOR BENEFIT GRANTED TO MEET EXPENSES WHOLLY, NECESSARILY AND EXCLUSIVELY INCURRED IN THE PERFORMANCE OF THE DUTIES OF AN OFFICE OR EMPLOYMENT OF PROFIT TO THE EXTENT TO WHICH SUCH EXPENSES ARE ACTUALLY INCURRED FOR THAT PURPOSE. CONSIDERING THE ALLOWANCES PRESCRIBED IN RULE 2BB( 1), IT IS THEREFORE OBSERVED THAT CONSTITUENCY ALLOWANCE, CON TINGENCY ALLOWANCE, MEDICAL ALLOWANCE AND TELEPHONE ALLOWAN CE ARE NOT PRESCRIBED IN THE RULE 2BB(1). IN RESPECT OF CONVEY ANCE ALLOWANCE AND CLERICAL ALLOWANCE, THE CIT(A) HELD THAT IT FA LLS IN CATEGORY MENTIONED UNDER RULE 2BB(1)(C) AND (D) RESPECTIVEL Y, HOWEVER, IN RESPECT OF THESE ALLOWANCE, THE ASSESSEE HAD NOT P RODUCED DOCUMENTARY EVIDENCE EITHER BEFORE THE ASSESSING O FFICER OR BEFORE THE UNDERSIGNED AS CONTEMPLATED IN THE PROVISIONS O F RULE 2BB(1). MERE FILING OF A CERTIFICATE FOR CAR RENTAL CHARGE S IT CANNOT BE SAID THAT THE APPELLANT PROVED WITH EVIDENCE THAT CAR W AS UTILIZED NECESSARILY, WHOLLY AND EXCLUSIVELY IN THE PERFORMA NCE OF DUTIES OF AN OFFICE. NO DETAILS SUCH AS DAY OF TOUR, PLACE O F TOUR, KILOMETRE, PURPOSE OF TOUR, NECESSITY TO MAKE TOUR IN PERFORMA NCE FOR THE DUTIES AND RELEVANT LOG BOOKS ARE PRODUCED TO VERI FY SUBMISSION OF THE APPELLANT. 6.03 I THEREFORE CONFIRM FINDING OF THE ASSESSIN G OFFICER THAT THE ASSESSEE DID NOT SATISFY CONDITION NO. 2 AND 3 AS MENTIONED IN PARA NO. 3.01 OF THIS ORDER AND ACCORDINGLY, GROUND NUM BER SECOND OF APPEAL IS DISMISSED FOR ALL THE ASSESSMENT YEARS. ASSESSED INCOME I S, THEREFORE, CONFIRMED FOR ALL THE ASSESSMENT YEA RS. 7. IN THE RESULT, THE CIT(A) PARTLY ALLOWED THE AP PEALS OF THE ASSESSEE. 12. AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSES SEE IS IN APPEALS BEFORE US RAISING THE FOLLOWING GROUNDS OF APPEAL, WHICH ARE COMMON IN ALL THE APPEALS UNDER CONSIDERATION: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE ORDER OF THE LEARNED CIT(A) IS ERRONEOUS IN LAW AND FACTS OF THE CASE. 2. THE LEARNED CIT(A) ERRED IN LAW AND FACTS OF THE CASE IN DENYING THE DEDUCTION U/S 10(14(I) AND SECTION 10(17)(III) OF THE ACT, AS THE ALLOWANCES LIKE CONSTITUENCY ALLOWANCE, CONVEYANCE ALLOWANCE, SECURITY ALLOWANCE, TELEPHONE ALLOWANCE, CLERICAL A LLOWANCE, CONTINGENCY ALLOWANCE ARE THE ALLOWANCES GRANTED CO VERED BY THE 7 ITA NOS. 826 TO 830/HYD/2007 SHRI B. DURGA PRASADA RAO PROVISIONS OF SECTION 10(14) AND SECTION 10(17) AND THE APPELLANT HAS FILED THE DETAILS OF THE AMOUNT INCURRED IN THE PERFORMANCE OF DUTIES OF AN OFFICE AS A MEMBER OF STATE LEGISLATIV E ASSEMBLY. 3. ON THE FACTS AND IN THE CIRCUMSTANCES THE LEARNE D CIT(A) HAVING REGARD TO THE NATURE OF DUTIES OF THE APPELLANT AND THE NATURE OF ALLOWANCES GRANTED OUGHT TO HAVE ALLOWED THE SAME A S NOT TO BE INCLUDED IN THE GROSS TOTAL INCOME AND OUGHT TO HAV E CANCELLED THE ASSESSMENT. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E HAVING REGARD TO THE NATURE OF DUTIES AND ALLOWANCES GRANTED THE LEARNED CIT(A) ERRED IN LAW AND FACTS OF THE CASE IN HOLDING THAT THE APPELLANT HAS NOT PRODUCED ANY DETAILS AS TO DAY OF TOUR, PLACE O F TOUR, KILOMETRE, PURPOSE OF TOUR, NECESSITY TO MAKE TOUR IN PERFORMA NCE FOR THE DUTIES AND RELEVANT LOG BOOKS ARE PRODUCED TO VERIF Y SUBMISSIONS OF THE APPELLANT. 13. THE LEARNED COUNSEL FOR THE ASSESSEE SHRI SAMUE L NAGADESI BEFORE US CANVASSED THAT THE ISSUE UNDER CONSIDERATION IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE COORD INATE BENCH IN THE CASE OF SHRI BIJJAM PARTHASARATHI REDDY VS. ACIT IN ITA NOS. 1158 & 1159/HYD/06 FOR AY 2001-02 AND 2002-03, ORDER DATED 28/02/2008. A COPY OF THE SAID ORDER IS AVAILABLE ON RECORD. 14. ON THE OTHER HAND THE LEARNED DR SHRI MALLIKARJ UN NEITHER CONTROVERTED THE SUBMISSIONS OF THE LEARNED COUNSEL FOR THE ASSESSEE NOR BROUGHT ANY CONTRARY DECISION IN THIS REGARD. 15. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUS ED THE RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS THE ORDER OF THE COORDINATE BENCH IN THE CASE OF SHRI BIJJAM PAR THASARATHI REDDY (SUPRA). IN THE SAID CASE, THE COORDINATE BENCH HEL D AS UNDER:- 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL ON RECORD. AS FOR THE CLAIM OF EXEMPTION I N RESPECT OF THE SALARY AND ALLOWANCES RECEIVED BY THE ASSESSEE IN H IS CAPACITY AS AN MLA, WE FIND THAT THIS ISSUE IS COVERED BY THE DECI SION OF THE TRIBUNAL DATED 31/01/2006 IN ITA NOS. 218 & 219/HYD /2005 IN THE CASE OF SHRI N. INDRASENA REDDY, HYDERABAD VS. ITO, A COPY OF 8 ITA NOS. 826 TO 830/HYD/2007 SHRI B. DURGA PRASADA RAO WHICH IS FILED BEFORE US. THE TRIBUNAL BY ITS ORDER DATED 31/01/2006 IN THAT CASE, AFTER DETAILED CONSIDERATION OF THE R ELEVANT PROVISIONS OF THE ACT, CONCLUDED VIDE PARA 6.1 THEREOF THAT IN THE CASE OF A MEMBER OF LEGISLATIVE ASSEMBLY OF THE STATE, PROVIS IONS OF BOTH S. 10(14(I) AND S.10(17)(III) WILL BE APPLICABLE. IN T HE CASE OF CIT VS. MADDI SUDARSHNAM, 174 ITR 659), HONBLE ANDHRA PRAD ESH HIGH COURT HAS OBSERVED THAT SO AS TO BE ENTITLED TO THE BENEFIT OF EXEMPTION U/S 10(14), IT IS ENOUGH IF A PERSON IS H OLDING AN OFFICE AND FOR THE PURPOSE OF PERFORMING THE DUTIES ASSOCI ATED WITH THAT OFFICE, HE IS GRANTED AN ALLOWANCE OR BENEFIT SPECI FICALLY TO MEET THE EXPENSES. IN THE CASE BEFORE US, THE ASSESSING OFFI CER HIMSELF HAS NOTED IN PARA 3(F) OF THE ASSESSMENT ORDER THAT THE ASSESSEE WAS A HIGH PROFILE MLA AND A RENOWNED PERSON AND IN ORDER TO MAINTAIN THE DIGNITY, STATUS AND LIFE STYLE OF A HIGH PROFIL E MLAS REPUTATION, THE ASSESSEE SHOULD HAVE INCURRED AN AMOUNT OF RS. 25,000 PER MONTH, VIZ. RS. 3 LAKHS PER ANNUM. CONSIDERING TOTA LITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ACCEPT THE CONTEN TION OF THE ASSESSEE AND DIRECT THE ASSESSING OFFICER TO ALLOW DEDUCTION IN RESPECT OF THE EXPENDITURE INCURRED BY THE ASSESSEE IN CONNECTION WITH THE PERFORMANCE OF THE DUTIES OF HIS OFFICE AS MLA. 16. SINCE THE ISSUE UNDER CONSIDERATION IS MATERIAL LY IDENTICAL TO THAT OF THE CASE DECIDED BY THE COORDINATE BENCH IN THE CAS E OF SHRI BIJJAM PARTHASARATHI REDDY (SUPRA), RESPECTFULLY FOLLOWING THE SAME WE SET ASIDE THE ORDER OF THE CIT(A) AND ALLOW THE ASSESSEES CL AIM OF DEDUCTION IN RESPECT OF THE EXPENDITURE INCURRED BY THE ASSESSEE IN CONNECTION WITH THE PERFORMANCE OF THE DUTIES OF HIS OFFICE AS MLA IN ALL THE APPEALS UNDER CONSIDERATION. THUS, ALL THE APPEALS FILED BY THE A SSESSEE ARE ALLOWED. 17. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE ARE ALLOWED. PRONOUNCED IN THE OPEN COURT ON 28/09/2012. SD/- SD/- ( CHANDRA POOJARI) (ASHAVIJAYARAGHAVAN ) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED: 28 TH SEPTEMBER, 2012. KV 9 ITA NOS. 826 TO 830/HYD/2007 SHRI B. DURGA PRASADA RAO COPY TO:- 1) SHRI B. DURGA PRASAD RAO, C/O, SHRI SAMUEL NAGAD ESI, CHARTERED ACCOUNTANT, 302, GOLDEN GREEN APARTMENTS, ERRAM MANZIL COLONY, PUNJAGUTTA, HYDERABAD - 82 2) ITO, WARD-1, GUDUR, NELLORE DT. . 3) THE CIT (A),GUNTUR 4) CIT, GUNTUR CHARGE, GUNTUR 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDER ABAD.