COMMISSIONER OF INCOME TAX JALANDHAR vs. CHAMAN LAL GARG

ITR/241/1995HC Punjab & HaryanaPHHC01032304199530 November 2006Author: MR. JUSTICE ADARSH KUMAR GOEL,MR. JUSTICE RAJESH BINDAL2 pages
AI SummaryDismissed

What were the facts?

The Commissioner of Income-tax, Jalandhar (Revenue) has filed an Income Tax Reference (ITR) No. 241 of 1995 before the High Court of Punjab and Haryana at Chandigarh. The reference arises from an order dated 24.8.1994 passed by the Income Tax Appellate Tribunal (ITAT), Amritsar Bench, in I.T.A. No.654(ASR)/1993. The assessment year in question is 1989-90. The dispute concerns the allowance of a deduction of 15% from incentive bonus received by the assessee, Chaman Lal Garg, who is a Development Officer of the Life Insurance Corporation (LIC) of India. The Dy. CIT(A) had allowed this deduction, which was upheld by the ITAT.

What did the High Court hold?

The High Court answered the question of law in favour of the revenue and against the assessee. The Court relied on its previous judgment in B.M.Parmar v. C.I.T. (1999) 235 ITR 679. Furthermore, the Court referred to its recent judgment dated 5.9.2006 in I.T.R. No.15 of 1995 (The Commissioner of Income Tax, Haryana, Rohtak v. Kamal Kishore Batra DO, LIC, Kalanaur, Rohtak), where a similar question was answered in favour of the revenue and against the assessee. The ratio decidendi is that for Development Officers of LIC, such a deduction from incentive bonus is not permissible. The operative direction is that the question referred is answered in favour of the revenue and against the assessee.

What were the issues?

1. Whether on the facts and in the circumstances of the case, the learned Tribunal is right in law in upholding Dy. CIT(A)'s order allowing deduction @15% out of incentive bonus received by the assessee who is a Development Officer of the L.I.C of India? Assessee's Contention: The assessee argued that the deduction of 15% from the incentive bonus was allowable. The judgment does not explicitly record the assessee's arguments beyond this implication. Revenue's Contention: The revenue contended that the deduction was not allowable. The judgment does not explicitly record the revenue's arguments beyond this implication.

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH

**** I.T.R. No.241 of 1995 Date of Decision:30.11.2006 The Commissioner of Income-tax, Jalandhar .....Petitioner Vs. Chaman Lal Garg .....Respondent CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MR. JUSTICE RAJESH BINDAL Present:- Dr. N.L.Sharda, Advocate for the revenue. **** ADARSH KUMAR GOEL, J. Following question of law has been referred for opinion of this Court by the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar, arising out of its order dated 24.8.1994 in I.T.A. No.654(ASR)/1993 in respect of assessment year 1989-90:- “Whether on the facts and in the circumstances of the case, the learned Tribunal is right in law in upholding Dy. CIT(A)'s order allowing deduction @15% out of incentive bonus received by the assessee who is a Development Officer of the L.I.C of India?” We find that the issue stands covered in favour of the revenue and against the assessee by the judgment of this Court in B.M.Parmar v. C.I.T. (1999) 235 ITR 679. In our recent judgment dated 5.9.2006 in I.T.R. No.15 of 1995 (The Commissioner of Income Tax

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