COMMISSIONER OF INCOME TAX Vs. M SATYANARAYANA SASTRY

JUDGEMENT

(1.) The following question of law was referred to us by the Income-tax Appellate Tribunal for our opinion : "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is correct in law in allowing the assessee's claim under section 10(13A) ?"

(2.) The question arises in respect of the assessment years 1979-80 and 1980-81. The assessee is the managing director of Krishi Engineering Company. He was granted house rent allowance by the company in respect of the said assessment years. He received Rs. 2,700 and Rs. 2,500, respectively. The Income-tax Officer disallowed the claim of allowance and included the said amount in the income on the ground that the assessee was residing in his own house. However, the Appellate Assistant Commissioner and the Income-tax Appellate Tribunal upheld the claim of the assessee having regard to the judgments of the Punjab and Haryana High Court in CIT v. (Justice) S. C. Mittal [1980] 121 ITR 503 and in CIT v. M.S. Gujral [1980] 125 ITR 655. At the request of the Revenue, the said question was referred to us.

(3.) It is brought to our notice that an Explanation was added to clause (13A) of section 10 of the Income-tax Act. The Explanation reads as follows :