COMMISSIONER OF INCOME TAX Vs. T K GINARAJAN

JUDGEMENT

(1.) AT the instance of the Revenue, the following question has been referred for opinion of this court, under Section 256(1) of the Income-tax Act, 1961 (in short "the Act"), by the Income-tax Appellate Tribunal, Cochin Bench (in short "the Tribunal") :

(2.) THE dispute relates to the question, (a) whether incentive bonus is salary, and (b) whether the assessee is entitled to claim any deduction over and above standard deduction available in respect of salary income.

(3.) AT the time of hearing the application, it was clearly accepted by learned counsel for the assessee that the stand taken before the Tribunal to the effect that the incentive bonus is not part of salary is not legally supportable. However, strong reliance has been placed on a decision of the Gujarat High Court in CIT v. Kiranbhai H. Shelat, 1999 235 ITR 635 , to support the conclusion of the Tribunal. On the other hand, learned counsel for the Revenue has relied on a decision of the Karnataka High Court in CIT v. M.D. Patil, 1998 229 ITR 71 in support of its stand. He submitted that the Revenue's stand is also in line with the decisions rendered by different High Courts, i.e., CIT v. E.A. Rajendran, 1999 235 ITR 514; B.M. Parmar v. CIT ; CIT v. B. Chinnaiah , 1995 214 ITR 368 and CIT v. Sri Anil Singh, 1995 215 ITR 224. It is not in dispute that a contrary view has been expressed by the Gujarat High Court in the decision referred to above.