COMMISSIONER OF INCOME TAX Vs. B CHINNAIAH

JUDGEMENT

(1.) In this batch of cases, under section 256(1) of the Income-tax Act, 1961, the following two questions are referred to this court for opinion :

(2.) To answer the above questions, it may be useful to refer to the facts in one of the cases. We propose to refer to the facts as stated in the statement of case in Revision Case No. 30 of 1991. The assessee was the Development Officer in the Life Insurance Corporation of India, Cuddapah. For the assessment year 1983-84, he returned an income of Rs. 29,070 and also disclosed that he received "incentive bonus" of Rs. 36,837.42 against which he claimed to deduct expenses at 40 per cent. of the said sum amounting to Rs. 14,732 and, accordingly, deducted the same. The Income-tax Officer disallowed the expenses claimed by the assessee. Dissatisfied with the order of assessment dated 27/03/1986, the assessee preferred an appeal before the Appellate Assistant Commissioner of Income-tax. On 27/05/1987, the Appellate Assistant Commissioner of Income-tax allowed the appeal upholding the claim of the assessee to deduct 40 per cent. of the incentive bonus towards expenses. Aggrieved by the said order of the Appellate Assistant Commissioner of Income-tax, the Revenue preferred an appeal before the Income-tax Appellate Tribunal, Hyderabad. That appeal was heard along with a batch of appeals out of which some were filed by the assessees and some by the Revenue. As common questions of fact and law were raised, the Tribunal disposed of those appeals by a common judgment on 31/01/1990. At the instance of the Revenue, the aforementioned questions of law were referred to this court under section 256(1) of the Income-tax Act, 1961.

(3.) Sri Habeeb Ansari, learned standing counsel for the Revenue, submitted that those questions are covered against the assessee by the two Division Bench judgments of this court in M. Krishna Murthy v. CIT [1985] 152 ITR 163 and K. A. Choudary v. CIT [1990] 183 ITR 29.