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Section 16, read with Section 17(1), of the Income-tax Act, 1961 - Salaries - Standard deductions - Assessment year 1986-87 - Assessee, a Development Officer, with insurance corporation, received incentive bonus and claimed deduction on account of expenditure incurred for earning same - Assessing Officer rejected assessee's claim taking view that incentive bonus was taxable as salary - Whether Tribunal was right in allowing assessee's claim - Held, no FACTS While working as Development Officer in service of the Life Insurance Corporation of India the assessee received incentive bonus. He claimed deduction from the amount so received by asserting that he had incurred expenditure on business promotion activities which enabled him to earn the incentive bonus. The Assessing Officer rejected the said claim holding that the incentive bonus was taxable as 'Salary'. On appeal, the Deputy Commissioner (Appeals) approved the view taken by the Assessing Officer. On further appeal, the Tribunal held that the assessee was entitled to the said deduction. On reference : HELD In view of the law laid down in the cases of B.M. Parmar, Development Officer, LIC of India v. CIT[1999] 235 ITR 679 / 102 Taxman 552 (Punj. & Har.) and K.K. Kansal v. CIT [2004] 270 ITR 375 /142 Taxman 24 (Punj. & Har.), the Tribunal was not right in law in allowing deduction as expenses out of incentive bonus. [Para 9] CASE REVIEW B.M. Parmar, Development Officer, Life Insurance Corporation of India v. CIT [1999] 235 ITR 679 (Punj. & Har.) and K.K. Kansal v. CIT [2004] 270 ITR 375 (Punj. & Har.) followed & relied upon. CASES REFERRED TO B.M. Parmar, Development Officer, LIC of India v. CIT [1999] 235 ITR 679/ 102 Taxman 552 (Punj. & Har.) [Para 3], K.K. Kansal v. CIT [2004] 270 ITR 375/142 Taxman 24 (Punj. & Har.)[Para 3], CIT v. A.K. Ghosh [2003] 263 ITR 536/ 131 Taxman 124 (MP) [Para 3] and CIT v.Kiranbhai N. Shelat [1999] 235 ITR 635 (Guj.) [Para 4]. Rajesh Bindal for the Applicant. Akshay Bhan for the Respondent. JUDGMENT Jasbir Singh, J. - The Income-tax Appellate Tribunal 'E' Bench, New Delhi (for short 'the Tribunal')vide its order dated 2-8-1994, has referred the…

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