COMMISSIONER OF INCOME-TAX Vs. SURENDRA KUMAR GUPTA

JUDGEMENT

(1.) THE Income -tax Appellate Tribunal has referred the following question of law for opinion of this Court: Whether the hon'ble Income -tax Appellate Tribunal was legally correct in confirming the action of Deputy Commissioner (Appeals) to allow the assessee's claim for deduction to the extent of 40 per cent. of the amount received as incentive bonus particularly when it is the part of salary ?

(2.) BRIEFLY stated the facts giving rise to the present reference are as follows:

(3.) THE respondent -assessee is a development officer with Life Insurance Corporation of India. In all the three assessment years he had received incentive bonus from Life Insurance Corporation against which he had claimed certain expenditure. The Assessing Officer was of the view that incentive bonus was part and parcel of the assessee's income under the head 'Salary' and as such he was entitled to only standard deduction under Section 16(i) of the Act. Following the decision of the hon'ble Andhra Pradesh High Court in the case of K. A. Choudary v. CIT : [1990] 183 ITR 29, the Assessing Officer rejected the assessee's claim of deduction of expenditure against incentive bonus, in the assessments completed, vide orders under Section 143(3) of the Income -tax Act dated March 12, 1991, for the assessment year 1989 -90 and dated February 28, 1992, for the assessment years 1990 -91 and 1991 -92.