Allowances

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ravi n (Querist)
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12 May 2010 Actual expenses incurred in performance of duties of development officer of LIC of india towards earnings of Incentive ,these expenses are claim deductions from incentive income to one of my client,

plese reply the if there is any case law or judgement copy in this regard

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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12 May 2010 Citation :- CIT Vs. Kiranbhai H. Shelat [1999] 235 ITR 635 (Guj).

Decision :- When the quantum of the incentive bonus given to the Development Officers of LIC admittedly included a portion of amount to enable the Development Officer to meet expenses for the discharge of their duties, that would amount to grant of special allowance to meet such expenses. The LIC has proposed to certify 30 per cent of the incentive bonus earned as necessary expenses that would have to be incurred. It would therefore have to be ascertained whether the expenditure intended to be met was actually incurred and if so incurred, whether any part of such special allowance still remained with the employee so as to be described as profit in addition to his normal salary and wages. Only the unspent amount out of this 30 per cent must be treated as salary under section 17(1)(iv) and brought to tax, and the balance must be deducted. This deduction would be warranted to reach the profit element, and cannot be denied to the assessee-employee on the ground that the statutory deductions are already provided in section 16.

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ravi n

ravi n (Querist)
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12 May 2010 Thank u very much warrier sir, is it possible to send the copy of judgement to my mail address?

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