Law:

Section:

Section 4 of the Income-tax Act, 1961 - Income - Assessable as - Whether city compensatory allowance paid to an employee is 'income' and liable to income-tax - Held, no Facts The applicant-association prayed for restraining their employers, i.e., insurance company, from deducting tax on city compensatory allowance as it was not 'income' and, therefore, not within the purview of income-tax. Held The insurance company was restrained from deducting any tax on city compensatory allowance in view of the of the Calcutta High Court in Syndicate Bank Officers' Association v. Union of India 1988 Tax LR 1135. Whatever tax had already been deducted from the salaries of the assessees during the financial year 1987-88 was to be refunded to each of them within four weeks. If the tax deducted had already been deposited with the department, the department should refund the amount or adjust the same against the tax payable by each of them. In the event any decision is rendered by the Supreme Court setting aside the decision of the High Court, the department would recover the tax so refunded, from the officers and the staff of the insurance company. Case referred to Syndicate Bank Officers' Association v. Union of India 1988 Tax LR 1135 (Cal.). P.K. Chatterjee for the Applicant. Alok Banerjee, Sil, Tapan Roy and Ghose for the Respondent. ORDER Mr. Mihir Bhattacharyya is directed to appear for the Income-tax Department as he has been appearing in all the matters. Federation of LIC Class-I Officers' Association (Eastern Zone Council) is added as party respondent. The order passed herein shall also apply to the members of the federation and Mr. Ghose appears for the insurance company. 2. Let the amendment…

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