The Commissioner Of Income Tax vs Shri.N.Shajilal on 13 February, 2009

       

  

  

 
 
  IN THE HIGH COURT OF KERALA AT ERNAKULAM

ITA.No. 82 of 2008()


1. THE COMMISSIONER OF INCOME TAX,
                      ...  Petitioner

                        Vs



1. SHRI.N.SHAJILAL, DEVELOPMENT OFFICER,
                       ...       Respondent

                For Petitioner  :SRI.P.K.R.MENON,SR.COUNSEL,GOI(TAXES)

                For Respondent  : No Appearance

The Hon'ble MR. Justice C.N.RAMACHANDRAN NAIR
The Hon'ble MR. Justice K.SURENDRA MOHAN

 Dated :13/02/2009

 O R D E R
                      C.N.RAMACHANDRAN NAIR &
                           K.SURENDRA MOHAN, JJ.
                 ....................................................................
             I.T. Appeal Nos.82,119,161,165 & 166 of 2008
                 ....................................................................
                 Dated this the 13th day of February, 2009.

                                        JUDGMENT

Ramachandran Nair, J.

The question raised in all these appeals filed by the Revenue is

whether the additional conveyance allowance granted by the LIC to

Development Officers is exempt from tax under Section 10(14) of the

Income Tax Act as held by the lower authorities. We have heard

Standing Counsel appearing for the department and have perused the

orders of the Tribunal and that of the first appellate authority.

2. This court had occasion to consider the issue in the context of

challenge against deduction of tax on additional conveyance allowance

in the decision in FRANCO JOHN & OTHERES V. UNION OF

INDIA & OTHERS reported in (2004) 269 ITR 441, wherein it was

held that reimbursement of actual expenditure incurred by employees

towards conveyance expenditure is allowable deduction, whether it be

granted as allowance or not. In all these cases, on facts we find that

atleast the first appellate authority found that the employer namely, LIC

2

which is a statutory Corporation under the Government of India is

reimbursing only actual expenditure incurred by Development Officers

for travel to promote business of the LIC. So much so, on facts,

respondent was found eligible for the exemption. We, therefore,

dismiss these appeals but leaving freedom to the department to

establish and disallow exemption in cases where the employee does not

prove that the additional conveyance allowance received is not

reimbursement of actual expenditure and is not a perquisite which is

outside the scope of Section 10(14) of the Act.

C.N.RAMACHANDRAN NAIR
Judge

K.SURENDRA MOHAN
Judge
pms