COMMISSIONER OF INCOME TAX Vs. CHANDULAL J PATEL

JUDGEMENT

(1.) IN this case, at the instance of the revenue, the following question has been referred to us for our opinion :

(2.) THE facts leading to this reference are as follows : The assessment years under consideration are the assessment years 1968 -69 and 1969 -70. The assessee is an individual and at the relevant time he was an employee of Calico Mills and was provided with a car by his employer for the two year under reference. During the course of the assessment for the assessment year 1968 -69, apart from the provision of car by his employer, no allowance in the nature of conveyance allowance was provided by the employer, whereas, for the assessment year 1969 -70, besides providing him with a car for his use, the employer -company also paid to the assessee an amount of conveyance allowance of Rs. 2,400. Against the income chargeable under the head 'Salaries' at Rs. 46,356 for the assessment year 1969 -70 inclusive of the perquisite value of the car in each year and the conveyance allowance for the assessment year 1969 -70, the assessee claimed deduction on account of expenses incurred in the maintenance and use of the car for the purpose of conveyance at Rs. 1,586 for the assessment year 1968 -69 and Rs. 1,594 for the assessment year 1969 -70. The amount which he claimed represented three -fourths of the total expenditure incurred by him in the maintenance of the car in the respective years and one -fourth of the total expenses was treated by the assessee himself as meant for personal use. The ITO rejected the claim of the assessee for deduction of the expenses claimed by him as incurred wholly, necessarily and exclusively for the purpose of his duties on the ground that the deduction of expenditure incurred on the maintenance of conveyance has been specifically provided for under s. 16(iv) of the Act which requires as the condition precedent the ownership of the vehicle or conveyance by the assessee and as in this case, admittedly, the assessee was not the owner of the car in question which he was using, he was not entitled to the deduction under s. 16(iv) of the Act. The ITO also negatived the assessee's claim for deduction under s. 16(v) on the ground that this residual clause for allowance of any expenditure incurred by an employee wholly, necessarily and exclusively in the performance of his duties expressly bars a deduction of expenditure on maintenance of conveyance.

(3.) AT the relevant time, that is, in the assessment years 1968 -69 and 1969 -70, the provisions of s. 16 as it then stood were as follows :