INCOME TAX

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

09 June 2011 DEAR SIR/EXPERT

Can v claim same deduction on the basis of the given judgement of CIT Vs. Kiranbhai H. Shelat [1999] 235 ITR 635 (Guj). the link given is as follows. http://aisha.caclubindia.com/experts/details.asp?mod_id=388050

Here the case of LIC Developement officer. and wanted to claim 30% duduction of incentive bonus and cash award received. As the duty is just like sales only se infact also expenes are happen....

So please advise me

CA MANOJ GUPTA

CA MANOJ GUPTA (Expert)
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09 June 2011 The majority of High Courts as noticed hereunder has taken the view that the incentive bonus received by the Field Officer of the Insurance Corporation is part of salary and is to be taxed under the head “income from salary” and while computing income from salary deduction may be allowed to the extent provided under section 16 of the Act and no further deductions can be allowed. The decisions holding directly and specifically this view are as under :
CIT v. Govind Chandra Pani (1995) 213 ITR 783 (Ori)
CIT v. Anil Singh (1995) 215 ITR 224 (Ori)
CIT v. Shiv Raj Bhatia (1997) 227 ITR 7 (Raj)
CIT v. V.K.A. Choudhary (1990) 183 ITR 29 (AP)
CIT v. B. Chinnaiah (1995) 214 ITR 368 (AP)
CIT v. M.D. Patil (1998) 229 ITR 71 (Karn)(FB)
CIT v. P. Arangaswamy (2000) 242 ITR 563 (Mad)
CIT v E.A. Rajendran (1999) 235 ITR 514 (Mad)
Gangadhar K. Ramareddy v. ITO (1996) 59 ITD 282 (Hyd-Trib)
CIT v. T.K. Ginarajan (2000) 243 ITR 709 (Ker)
CIT v. Gopal Krishna Suri & Ors. (2001) 248 ITR 819 (Bom)
Nandlal H. Ramani v. ITO (1996) 58 ITD 525 (Ahd-Trib)
In M.D. Patil’s case (supra), the Full Bench of the Karnataka High Court also held that the incentive bonus or commission is not granted by the corporation for the purpose as set out in section 10(14) and, therefore, the assessee cannot claim deductions of 40 per cent under section 10(14) for expenses necessarily incurred for the purpose.
In CIT v. Kiranbhai H. Shelat & Ors. (1999) 235 ITR 635 (Guj), Gujarat High Court held that the incentive bonus received by the Development Officer is to be taxed under the head “salaries” but deduction of 30 per cent incentive bonus was allowable so as to enable him to meet the necessary expenses incurred by him.
But as discussed hereinbefore, section 16 allows limited amount of expenses in computing the income from salaries, hence no further expenses can be allowed which can be said to have been incurred for earning the income.

CA MANOJ GUPTA
JODHPUR
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Querist : Anonymous

Querist : Anonymous (Querist)

11 June 2011 Sir firstly very good morning

Sir again many many thanks for ur reply...
but i want to ask one thing that above all judgement are showing disallowance but somewhere i read that whenever there are two judgement for the same matter than assessee can opt which is most beneficial to him. So on the basis of that can we opt to claim expenditure....

If the expanses are allowable then there will be good tax saving so i wish to make it possible....

I know under 16 it is not allowabel.....

But still it is a fact that expanses are really happen that what should i do....

Can i choose GUJARAT high court judgement (kiran kumar shelat) which is favouring me

Please guide me

If at all m making any mistake kinly please correct me

Again many many thanks for giving ur vbaluable time.....

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