ASHOK KUMAR MALIK,DO,LIC LUDHI vs. CIT LUDHIANA

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ITR/21/1999HC Punjab & HaryanaPHHC01038665199906 November 2006Author: MR. JUSTICE ADARSH KUMAR GOEL,MR. JUSTICE RAJESH BINDAL2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the incentive bonus received by a development officer of the LIC is taxable under the head ‘salary’ and is not entitled to any deduction on account of expenditure other than the standard deduction available under Section 16(1) of the Income-tax Act, 1961. The Court found that this issue was covered by 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 such incentive bonus, being part of the remuneration for services rendered, falls under the head 'salary' and is subject to the statutory deductions prescribed for salary income.

What were the facts?

This case involves a reference to the High Court of Punjab and Haryana at Chandigarh concerning an order passed by the Income Tax Appellate Tribunal (ITAT), Chandigarh Bench, dated 30.07.1997. The reference arises from ITAT's orders in I.T.A. Nos. 1335 & 1336/Chd/1991, pertaining to assessment years 1988-89 and 1989-90. The assessee is Shri Ashok Kumar Malik, Ludhiana, and the respondent is the Commissioner of Income Tax, Ludhiana. The core of the dispute revolves around the taxability of incentive bonus received by a LIC development officer and the deductions allowable against it.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in taking the view that the amount received as incentive bonus by a development officer of the LIC was taxable under the head ‘salary’? 2. Whether the incentive bonus was entitled to any deduction on account of expenditure other than the standard deduction available u/s 16(1) of the Income-tax Act, 1961? Assessee's Contentions: The judgment does not record any specific contentions made by the assessee before the High Court. The reference is framed as a question of law for the Court's opinion. Revenue's Contentions: The judgment does not record specific contentions made by the revenue before the High Court. However, the Court's decision indicates that the revenue's position, which aligns with the ITAT's order, was upheld.

Which sections of the Income-tax Act were involved?

Section 16(1)

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. I.T.R. No.21 of 1999 Date of decision: 06.11.2006 Shri Ashok Kumar Malik, Ludhiana. -----Applicants Vs. The Commissioner of Income Tax, Ludhiana. -----Respondent CORAM:- HON'BLE MR JUSTICE ADARSH KUMAR GOEL HON'BLE MR JUSTICE RAJESH BINDAL Present: Mr. S.K. Garg Narwana, Advocate for the revenue. -----

ORDER: Following question of law has been referred for opinion of this Court by the Income Tax Appellate Tribunal, Chandigarh Bench, Chandigarh, arising out of its order dated 30.07.1997 in I.T.A. Nos.1335 & 1336/Chd/1991 in respect of assessment years 1988-89 & 1989-90:- “Whether on the facts and in the circumstances of the case, the Tribunal was right in law in taking the view that the amount received as incentive bonus by a development officer of the LIC was taxable under the head ‘salary’ and not entitled to any deduction on account of expenditure other than the standard deduction available u/s 16(1) of the Income-tax Act, 1961?” 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, Haryana, Rohtak v. Kamal Kishore Batra DO, LIC, Kalanaur, Rohtak), we have answered the question in favour of the revenue and against the assessee. Accordingly, the question referred is answered in favour of the revenue and against the assessee. ( ADARSH KUMAR GOEL ) JUDGE November 06, 2006 ( RAJESH BINDAL ) ashwani JUDGE

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