COMMISSIONER OF INCOME TAX Vs. GHOSAL B

JUDGEMENT

(1.) The Income Tax Appellate Tribunal, Cochin Bench (hereinafter called the Tribunal) has referred to this Court under S.256(1) of the Income Tax Act, 1961 (for short the Act) the following question:

(2.) The relevant facts as can be gathered from the statement of the case may be briefly staked thus: The assessee, an individual, is an employee of M/s. Harrisons & Crossfied Ltd. The assessment year with which we are concerned is 1975-76 for which the relevant accounting period is the year ended 31-3-1975. During the said period the assessee had received Rs. 38,110/- by way of salary, dearness allowance and bonus. Out of the said amount, Rs. 4,410/- represented the bonus received by the assessee from his employer. The assessee had also received from the employer during the accounting period an amount of Rs. 4, 200/- as house rent allowance. The actual rent paid by him during that year was Rs. 4,350/-. S.10(13A) of the Act provides for grant of exemption in respect of house rent allowance subject to the limits prescribed in the Rules. The relevant rule relating to the matter is R.2A of the Income Tax Rules. That rule reads:

(3.) The assessee contended before the Income Tax Officer that for the purposes of clauses (b) and (c) of R.2A the amount of bonus received by him should not be treated as forming part of his "salary". The Income Tax Officer did not accept this contention and hence he computed the amount in respect of which exemption could be allowed to the assessee as being the quantum of rent paid by the assessee in excess of 10 per cent of his salary inclusive of bonus by applying clause (b) of R.2A. Accordingly the Income Tax Officer allowed to the assessee the benefit of exclusion from the total income only in respect of an amount of Rs. 540/- under S.10(13A).