COMMISSIONER OF INCOME TAX Vs. E A RAJENDRAN

JUDGEMENT

(1.) At the instance of the Department, the Tribunal referred the following questions for the opinion of this Court under s. 256(1) of the IT Act, 1961 :

(2.) The assessee is a Development Officer in Life Insurance Corporation of India (for short "LIC"), and has received incentive bonus and also additional conveyance allowance to cover the expenses incurred by him on account of conveyance. The AO rejected the claim of the assessee that the additional conveyance and incentive bonus have to be exempted from tax. On appeal, the Dy. CIT(A) allowed 40 per cent of the incentive bonus as deduction and also deleted the addition made by the AO with regard to the additional conveyance allowance, following the decision of the Tribunal in ITA Nos. 1691 and 1692/Mad/88 in the case of T. S. Sivaram. In the Revenue's appeal, the Tribunal upheld the finding of the first appellate authority.

(3.) The point for consideration is, whether the entire amount of additional conveyance allowance and 40 per cent of the incentive bonus received by the assessee as an employee of LIC, are admissible deductions.