COMMISSIONER OF INCOME TAX Vs. MALI RAM VERMA

JUDGEMENT

(1.) BY THE COURT : On the application filed under S. 256(1), the Tribunal has referred the following question for our opinion :

(2.) THE assessee is a development officer of the LIC. In the year under consideration, the assessee claimed deduction of 50 per cent on account of expenditure out of the incentive bonus earned by him. The return was processed under S. 143(1)(a) without any adjustment being made to the returned income. The AO, however, subsequently withdrew the claim of the assessee by passing an order under S. 154. The assessee preferred an appeal before the Dy. CIT(A). Dy. CIT(A) quashed the order of AO under S. 154 of the IT Act, 1961, on the ground that whether assessee is entitled for deduction of any expenditure out of incentive bonus, is a debatable issue, therefore, ITO cannot withdraw the expenditure on incentive bonus in an order under S. 154 of the Act. The view taken by Dy. CIT(A) has been affirmed by the Tribunal vide order dt. 12th Jan., 1998.

(3.) MR . Mathur further submits that when there is a decision of the High Court on the date of order of Tribunal, Tribunal cannot say that issue is debatable and Tribunal is bound to follow the view taken by the jurisdictional High Court.