COMMISSIONER OF INCOME TAX Vs. MOTI MAL MOHNOT

JUDGEMENT

(1.) THE Tribunal, Jaipur Bench, Jaipur, for the asst. yr. 1985-86, in the case of the assessee, by its order dt. 28th Dec., 1989, referred the following question of law, under S. 256(1) of the IT Act, 1961, for the opinion of this Court :

(2.) THE assessee was working as the Development Officer with the LIC of India and was posted at Pali. The assessee, during the asst. yr. 1985-86, received an amount of Rs. 55,160 as the incentive bonus from the LIC of India. He claimed a deduction on this amount. The ITO Pali, by its order dt. 28th Feb., 1986, disallowed the deduction on the amount of incentive bonus by holding that the incentive bonus is simply an extra remuneration received by the employee for which he had not to spend any amount. The definition of the term 'salary' clearly includes such remuneration and extra remuneration in its fold and hence it is clearly taxable. Dissatisfied with the order dt. 28th Feb., 1986 passed by the ITO, disallowing the deduction on the amount of the incentive bonus, the assessee preferred an appeal before the AAC, Jodhpur. The appeal filed by the assessee relating to the deduction on the amount of Rs. 50,160 received by him by way of incentive bonus, was partly allowed by the AAC. The AAC allowed 20 per cent deduction on the amount of incentive bonus of Rs. 50,160 and dismissed the appeal so far as the remaining relief is concerned.

(3.) THE Tribunal allowed the deduction @ 50 per cent on the amount of incentive bonus relying upon the Board's Circular.