Law: Income Tax Act, 1961

Section: 16,256

(a) Income-tax-----Reference---Conflict of opinion on question---Question has to be referred---Indian Income Tax Act, 1961, S.256. (b) Income-tax----Reference---Salary---LIC---Incentive Bonus paid to Development Officers---Whether part of salary---Question of law---Indian Income Tax Act, 1961, Ss. 16 & 256: Held, that in case of conflict of opinion, a referable question arises and is required to be answered by the Court so as to settle the controversy. The question whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was justified in holding that incentive bonus and additional conveyance allowance granted to the Development Officer of the Life Insurance Corporation was not a part of salary and that the assessee was entitled to claim 40% expenses out of it, had to be referred. Choudary (K. A.) v. CIT (1990) 183 ITR 29 (AP); CIT v. Mangilal Jain (1997) 223 ITR 98 (MP) and CWT v. Gayatridevi (Smt.) (1996) 222 ITR 797 (MP) ref. JUDGMENT A. R. TIWARI, J.---The applicant (Commissioner of Income-tax, Bhopal), has filed this application under section 256(2) of the Income Tax Act, 1961 (for short "the Act"), seeking a direction to the Tribunal to state the case, and refer the question as extracted below arising out of the order dated March 30, 1990, passed by the Tribunal in I.T.A. No.653/Ind. of 1988 after rejection of the application, presented under section 256(1) of the Act, registered as R.A. No. 142/Ind of 1990 for the assessment year 1981-82 on June 10, 1991: "Whether, on the facts and in the circumstances of the case, the Income7tax Appellate Tribunal was justified in holding that incentive bonus and additional conveyance allowance granted to the Development Officer of the Life Insurance Corporation was not a part of salary and that the assessee was entitled to claim 40 per cent expenses out of it?" Briefly stated, the facts of the case are that the claim of 40 per cent expenses from the receipts of incentive bonus and additional conveyance allowance was negatived by the Income-tax Officer and the Appellate Assistant Commissioner. The Tribunal, however, allowed the appeal of the assessee holding that the incentive…

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