IN THE HIGH COURT OF JUDICATURE AT PATNA
M.A. No. 689 of 1999
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Dwarika Prasad, Development Officer, son of Ram Narain
Rai, resident of Rod No. 3 Ashok Nagar, P.S. Kankarbagh,
Dist. Patna .................................. Assessee/Appellant
Versus
1. Commissioner of Income Tax, Patna and
2. Income Tax Officer,Patna...Assessing Officer/Respondents
APPEARANCE
For the appellant: Mr. Ajay Rastogi, Advocate.
For the respondents: Mr. Harshwardhan Prasad and
Mrs. Archana Sinha, Advocates.
CORAM: HONOURABLE THE CHIEF JUSTICE
And
HONOURABLE MR. JUSTICE JYOTI SARAN
ORAL ORDER
(Per: HONOURABLE THE CHIEF JUSTICE)
10. 28/09/2010 This appeal preferred under Section 260A of
the Income Tax Act 1961 (hereinafter referred to as `the
Act’) raises a question of law “whether the incentive
bonus earned by the assessee, a Development Officer
of the Life Insurance Corporation of India, is a
`salary’ as defined in Section 17(1)(iv) of the Act and
whether the Income Tax Appellate Tribunal is
justified in holding that the assessee is not entitled to
deduction of expenses to the extent of 40% of such
incentive bonus.”
The appellant Dwarika Prasad is a
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Development Officer in the Life Insurance Corporation
of India (hereinafter referred to as `the Corporation’). In
the previous year relevant to the Assessment Year 1995-
96, the appellant was paid incentive bonus in the sum of
Rs. 2,39,996.00/-. The appellant returned the amount of
incentive bonus under the head `Income from other
sources’ after deducting 40% of the amount. The
Assessing Officer did not allow the said deduction. The
appellant preferred Appeal No. 212/P/96-97 before the
Commissioner of Income Tax (Appeals). The
Commissioner of Income Tax (Appeals) by his order
dated 20th September 1996 dismissed the appeal. The
same was affirmed by the Income Tax Appellate
Tribunal on 30th August 1999 by order made in I.T.A.
No. 702/Pat/1996. Therefore, the present appeal.
Learned Advocate Mr Ajay Rastogi has
appeared for the appellant. He has relied upon the
judgment of the Gujarat High Court in the matter of
Commissioner of Income-Tax Vs. Kiranbhai H.
Shelat & Anr. (235 ITR 635). He has submitted that as
held by the Gujarat High Court the appellant is entitled
to a deduction of the amount actually spent by him to the
maximum of 30% of the bonus.
Learned Advocate Mrs. Archana Sinha has
appeared for the department. She has contested the
appeal. She has submitted that the matter is set at rest by
this Court in the matter of Commissioner of Income-
Tax, Bihar, Patna Vs. Ramjee Prasad (Tax Case No.
13 of 1991).
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For the reasons recorded by us in our judgment
and order dated 28th September 2010 passed in Tax Case
No. 30 of 1990, we hold that the amount of incentive
bonus received by the appellant was a `salary’ within the
meaning of Section 17(1)(iv) of the Act and that he was
not entitled to 40% deduction claimed by him.
The appeal is dismissed. There shall be no
order as to costs.
( R. M. Doshit, CJ.)
( Jyoti Saran, J.)
Dilip