Law:

Section:

Section 10(14) of the Income-tax Act, 1961 - Special allowance - Whether where assessee produced no evidence that amount of conveyance and additional conveyance allowance was reimbursed only because of actual use of that amount for performance of duty during course of employment, deduction of such allowance could not be allowed under section 10(14) - Held, yes FACTS The Assessing Officer asked for the evidence whether the expenses on conveyance were used wholly, exclusively and necessarily for the purpose of performing of the duties by the assessee, in the course of employment. The assessee had not submitted any such evidence before him and accordingly held that the additional conveyance allowance which was not a reimbursement of actual expenditure incurred, clearly formed part of salary under section 17(1)(iv) and was liable to be taxed in the hands of the assessee. The Tribunal also held that under clause (14) of section 10, no such allowance be permitted for deduction unless that had been actually used by the assessee. On appeal : HELD Under sub-clause (i) of section 10(14) the requirement of exemption is that the amount should be actually used for wholly, necessarily and exclusively in the performance of the duties in employment. The assessee had not produced evidence even before the Tribunal that the amount had been reimbursed only because of actual use of that amount for performance of duty during the course of employment. The Tribunal had rightly disallowed the deduction claimed for. The appeal was, thus, dismissed. Note : The case was decided in favour of the revenue. Dinesh Mehta for the Applicant. Sandeep Bhandawat for the Respondent. JUDGMENT Heard learned counsel for the parties. The appeal was admitted on July 17, 2001, to consider the following substantial question of law : "Whether, on the facts and circumstances of the case, the learned Income-tax Appellate Tribunal was justified in holding that the conveyance and additional conveyance allowance paid to the appellant who is an employee of the LIC is not exempt under section 10(14)(ii) of the Income-tax Act, 1961 ?" The appellant is an officer in the Life Insurance Corporation of India and posted…

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