COMMISSIONER OF INCOME TAX Vs. E A RAJENDRAN

JUDGEMENT

(1.) AT the instance of the department, the Tribunal referred the following question for the opinion of this Court under section 256(2) of the Income-tax Act, 1961 :

(2.) THE assessee is a Development Officer in the Life Insurance Corporation of India ('LIC') and has received incentive bonus and also additional conveyance allowance to cover the expenses incurred by him on account of conveyance. THE Assessing Officer rejected the claim of the assessee that the additional conveyance and incentive bonus have to be exempted from tax. On appeal, the Deputy Commissioner (Appeals) allowed 40 per cent of the incentive bonus as deduction and also deleted the addition made by the Assessing Officer with regard to the additional conveyance allowance, following the decision of the Tribunal in the case of T. S. Sivaram [IT Appeal Nos. 1691 & 1692 (Mad.) of 1988]. In the revenue's appeal, the Tribunal upheld the finding of the first appellate authority.

(3.) IN Notification No. S.O. 143 (E) dated 21-2-1989 (published in [1989] 176 ITR 132 (St.), is as follows :