R K SALHOTRA Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THIS is an appeal preferred under S. 260A of the IT Act. The short question of law which has been projected in this appeal is whether the incentive bonus, which is allowed to a Development Officer of Life Insurance Corporation of India is to be taken into consideration for assessing the total taxable income of such an officer and if it is to be calculated, then the further plea which has been put across is that whether only such portion of the allowance/bonus which is certified as having been incurred by the concerned officer in the performance of his duties should be taken as exempted under the provisions of S. 10(14) of the aforesaid Act. The other plea which has been put across is that the CBDT issued a circular giving certain directions and that acquired force of law and notwithstanding the fact that this may be contrary to the provisions of the IT Act, nevertheless, this can and in fact, has been given effect to. Thus, the issues which are required to be gone into in the present case are :

(2.) IT is submitted that the above two decisions are directly on the point. It has been observed that a Development Officer of Life Insurance Corporation of India is a whole-time employee of the Corporation. He is supposed to promote and develop life insurance business for the Corporation. It has also been observed that the primary concern and the function is to secure more business for the Corporation. Revenue thus urges that if in the performance of duty which is taken as the normal duty, some incentive is given, then that has to form a part of the taxable income. The relevant observations made by the Punjab and Haryana High Court in this regard are being reproduced below :

(3.) THE above judgment would be commented upon while dealing with the second and third question formulated above because it deals with the same concept as has been put across on the basis of circular issued by the CBDT.