INCOME TAX OFFICER Vs. L N GOSWAMI

JUDGEMENT

(1.) In this appeal the department objects to the AACs deletion of the amount of Rs. 8,548 (sic) added by the ITO, to the total income of the assessee in the return for the assessment year 1978-79. The assessee filed a cross-objection supporting the order of the AAC.

(2.) During the financial year 1977-78, the assessee was a salaried employees of the LIC, Asansol Branch, holding the office of the development officer. From the salary certificates for the said financial year granted to the assessee, it was seen that the total amount of salaried included fixed monthly conveyance allowance aggregating to Rs. 3,028 and additional conveyance allowance of Rs. 8546.35, the assessee claimed exemption in respect of both the fixed monthly conveyance allowance as well as the additional conveyance allowance. The employer treated the fixed monthly conveyance allowance of Rs. 3,028 as exempt from tax under section 10(14) of the Income-tax Act, 1961 (the Act). But the additional conveyance allowance amounting to Rs. 8,546 was subjected to tax. The claim for exemption of the additional conveyance allowance was also rejected by the ITO. In lan appeal the AAC was of the opinion that the payment of additional conveyance allowance was also rejected by the ITO. In an appeal is linked with extra touring by a development officer in procuring business over and above his fixed quota. In this view of the matter he deleted the addition of Rs. 8546 (and not Rs. 8,548 as stated in the grounds of appeal) made by the ITO. The department preferred this appeal against the said order which is supported by the assessee by filing a cross-objection.

(3.) It was contended by the departmental representative that the amount paid as additional conveyance allowance is really in incentive or additional remuneration for bringing in additional business by the development officers like the assessee. He also contended that additional conveyance allowance as sanctioned by the employer of the assessee under its Circular No. DD/ZD/108/1973, dated 12-11-1973, was not granted by the employer, LIC, to meet expenses wholly, necessarily and exclusively incurred in the performance of the duties of the office of the development officers. In this connection he drew our attention to the decision in CIT v. Tejaji Farasram Kharawalla Ltd., 1968 67 ITR 95. on the term incurred and A. K. Venkiteswaran v. CIT, 1973 92 ITR 233. on the term expenditure incurred wholly, necessarily and exclusively in the performance of duties. This connection was opposed on behalf of the assessees, who contended that the additional conveyance allowance was granted by his employer to meet expenses wholly, necessarily land exclusively in the performance of his duties and that the amount given to him as additional conveyance allowance was in fact wholly, necessarily and exclusively incurred in performance of such duties.