COMMISSIONER OF INCOME TAX Vs. MOHAN RAO U

JUDGEMENT

(1.) AT the instance of the Department, the Tribunal referred the following question for the opinion of this court under section 256(1) of the Income-tax Act, 1961 :

(2.) THE assessee is Mr. U. Mohan Rao who was an employee in the capacity of managing director in two companies, namely, Cutfast Abrasive Tools Pvt. Ltd., and Cutfast Bonded Abrasives Pvt. Ltd., receiving remuneration from each of the companies. He was provided with a car by Cutfast Abrasive Tools Pvt. Ltd., for the purpose of his employment and in regard to his income by way of salary from this company, he claimed a standard deduction of Rs. 1,000. From the other company, namely, Cutfast Bonded Abrasives Pvt. Ltd., he did not get any conveyance and he claimed a standard deduction of Rs. 3,500. Thus, against the salary income derived from both the companies, he claimed a deduction of Rs. 4,500. THE Income-tax Officer held that since the income derived from salary from each of the companies was to be charged under the head "Salaries", only one consolidated deduction of Rs. 1,000 is admissible and accordingly restricted the deduction in the assessment. On appeal, the Commissioner of Income-tax (Appeals) accepted the assessee's contention and directed deduction as claimed by the assessee. THE Department came in appeal against this order and the Tribunal on consideration of the relevant provisions of the Act upheld the order of the Commissioner of Income-tax (Appeals) and rejected the objection of the Department.

(3.) IN view of the foregoing reasons we answer the abovesaid question in the affirmative and against the Department. No costs.