COMMISSIONER OF INCOME TAX Vs. GANESH CHAND SAXENA

JUDGEMENT

(1.) The Income Tax Appellate Tribunal, New Delhi has referred the following questions of law under Section 256(1) of the Income Tax Act, 1961 (hereinafter referred to as "the Act") for opinion to this Court: "Whether the Income Tax Appellate Tribunal has been in error in holding that the assessee, a Development Officer, was entitled to 40% expenses in relation to incentive bonus to the tune of Rs. 4,569/-, Rs. 14,558/- and Rs. 19,300/- for the three years under reference respectively, received by him over and above his salary from the Corporation?"

(2.) The reference relates to the Assessment Years 1980-81 to 1982-83.

(3.) Briefly stated, the facts giving rise to the present reference are as follows:- The respondent assessee was a Development Officer in the Life Insurance Corporation of India. During the assessment years in question he received certain incentive bonus from the Corporation amounting to Rs. 4,569/-, Rs. 14,558/- and Rs. 19,300/- respectively, in addition to his salary. He had claimed the expenses to the tune of 40% from the incentive bonus in respect of each assessment years. The Income Tax Officer had disallowed the claim. Feeling aggrieved, the respondent preferred separate appeals before the Appellate Assistant Commissioner who has allowed the claim by holding that 40% deduction was reasonable as in respect of the commission received similar expenses are being allowed. The Revenue, feeling aggrieved, preferred appeals before the Tribunal. The Tribunal has held that like expenses in connection with the earning of commission from the Corporation, similar deduction should be allowed in respect of the incentive bonus also. The Tribunal has accordingly upheld the order passed by the Appellate Assistant Commissioner.