Shri Rajendra Mani Yadav, Faizabad V. Dy. Commissioner Of Income Tax, Faizabad

ITA 902/LKW/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4656 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-03-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 02-03-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 18-12-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Salary income
• Section: 10

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.902/LKW/2014 ASSESSMENT YEAR:2011 12 D.C.I.T., CIRCLE FAIZABAD VS SHRI RAJENDRA MANI YADAV, D. O., LIC, AYODHYA BRANCH, AMRAVATI BHAWAN, DEOKALI ROAD, FAIZABAD. PAN:AAHPY5704E (RESPONDENT) (APPELLANT) SHRI P. K. KAPOOR, C.A. APPELLANT BY SHRI AMIT NIGAM, D. R. RESPONDENT BY 02/03/2016 DATE OF HEARING 17/03/2016 DATE OF PRONOUNCEMENT O R D E R PER A. K. GARODIA, A.M. THIS IS ASSESSEES APPEAL DIRECTED AGAINST THE OR DER PASSED BY LEARNED CIT(A) I, LUCKNOW DATED 25/09/2014 FOR THE ASSESSM ENT YEAR 2011 12. 2. IN THIS APPEAL, THE ASSESSEE HAS RAISED AS RAISE D AS MANY AS 9 GROUNDS BUT THE GRIEVANCES OF THE ASSESSEE ARE ONLY TWO. THE FI RST GRIEVANCE IS ABOUT DISALLOWANCE OF RS. 58,500/- CLAIMED BY THE ASSESSE E ON ACCOUNT OF ADDITIONAL CONVEYANCE ALLOWANCE. THE SECOND GRIEVANCE IS ABOUT DISALLOWANCE OF RS. 12,28,982/- CLAIMED BY THE ASSESSEE ON ACCOUNT OF E XPENSES INCURRED FOR THE BUSINESS OF LIC TO THE EXTENT OF 40% OF INCENTIVE BO NUS RS. 30,72,453/- RECEIVED FROM LIC. 3. REGARDING THE FIRST ISSUE, LEARNED AR OF THE ASS ESSEE SUBMITTED THAT THE COPY OF TDS CERTIFICATE ISSUED BY LIC IN FORM NO. 16 IS AVAILABLE ON PAGES 2 TO 7 OF THE PAPER BOOK AND IN THE SAME, ENTIRE AMOUNT OF AD DITIONAL CONVEYANCE ALLOWANCE WAS SHOWN AS EXEMPT. HE ALSO SUBMITTED TH AT AS PER THE TRIBUNAL ORDER 2 RENDERED IN THE CASE OF S. N. MISHRA VS. ITO AS REP ORTED IN 70 ITD 539, THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE. HE FURTHER SU BMITTED THAT IN THIS CASE, IT WAS HELD THAT ADDITIONAL CONVEYANCE ALLOWANCE GRANTED TO DO OF LIC IS EXEMPT U/S 10 (14) TO THE EXTENT OF ACTUALLY SPENT AND LIC HAS CE RTIFIED THE SAME AS EXEMPT AFTER VERIFYING THAT IT WAS ACTUALLY SPENT IN FULL. LEARN ED D. R. OF THE REVENUE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FI ND THAT THE FIRST ISSUE ABOUT ADDITIONAL CONVEYANCE ALLOWANCE GRANTED TO DO OF LIC IS COVERED IN FAVOUR OF THE ASSESSEE BY THIS TRIBUNAL ORDER CITED BY LEA RNED AR OF THE ASSESSEE AND LEARNED DR OF THE REVENUE DID NOT POINT OUT ANY DIF FERENCE IN LAW OR IN FACTS. THEREFORE, RESPECTFULLY FOLLOWING THIS TRIBUNAL ORD ER, THIS ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE. 5. REGARDING THE SECOND ISSUE, LEARNED AR OF THE AS SESSEE SUBMITTED THAT AFTER 01.04.1989, THIS ISSUE IS COVERED IN FAVOUR O F THE ASSESSEE AS PER THE JUDGMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF T. K. GINARAJAN VS. CIT AS REPORTED IN 356 ITR 618. LEARNED D. R. OF THE REVEN UE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FI ND THAT THE SECOND ISSUE IS PARTLY COVERED IN FAVOUR OF THE ASSESSEE BY THIS JU DGMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF T. K. GINARAJAN VS. CIT (SU PRA). IT WAS HELD IN THIS CASE THAT WITH EFFECT FROM 01.04.1989, THE LIC ITSELF ISS UED A CLARIFICATION TO THE EFFECT THAT THE D.O. WOULD BE ENTITLED TO CLAIM REIMBURSEM ENT TO THE EXTENT OF 30 % OF THE INCENTIVE BONUS GRANTED TO THEM AND THUS, THE D ISPUTE IS CONFINED ONLY TO THE PERIOD PRIOR TO 01.04.1989 AND AFTER 01.04.1989, ON LY BALANCE OF INCENTIVE BONUS AFTER EXCLUDING 30% OF INCENTIVE BONUS WILL BE TREA TED AS SALARY INCOME. IN THE REPLY DATED 26.08.2013 SUBMITTED TO THE A.O. COPY O N PAGES 14 TO 17 OF THE PAPER BOOK, FULL DETAIL OF EXPENSES OF RS. 13,41,092.94 I NCURRED 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 P RESCRIBED PERCENTAGE OF 30% 3 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 BU SINESS OF LIC. UNDER THESE FACTS, BY RESPECTFULLY FOLLOWING THIS JUDGMENT OF HONBLE 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 ALLOWE D AS DEDUCTION FROM INCENTIVE BONUS AS AGAINST DEDUCTION OF RS. 12,28,9 82/- 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. S INCE, WE ARE FOLLOWING THE JUDGMENT OF HONBLE APEX COURT, OTHER JUDGMENTS OF VARIOUS HIGH COURTS INCLUDING THAT OF HONBLE ALLAHABAD HIGH COURT ARE NOT RELEVA NT. THIS ISSUE IS DECIDED PARTLY IN FAVOUR OF THE ASSESSEE. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS PARTLY ALLOWED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GAROD IA ) JUDICIAL MEMBER ACCOUNTANT MEMB ER DATED:17/03/2016 *SINGH COPY OF THE ORDER FORWARDED TO : 1.THE APPELLANT 2.THE RESPONDENT. 3.CONCERNED CIT 4.THE CIT(A) 5.D.R., I.T.A.T., LUCKNOW A SSTT. REGISTRAR