CI.T JLDHR vs. SC NAGPAL

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ITR/74/1997HC Punjab & HaryanaPHHC01035450199702 November 2006Bench: MR. JUSTICE ADARSH KUMAR GOEL,MR. JUSTICE RAJESH BINDAL1 pages

AI SummaryDismissed

What did the High Court hold?

The High Court held that the question referred stands covered in favour of the revenue and against the assessee. The Court cited its previous judgment in B.M. Parmar v. C.I.T. (1999) 235 ITR 679 and a more 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). The ratio decidendi is that expenses at a fixed rate cannot be allowed from incentive bonus received by an employee without specific evidence or statutory provision. The operative direction was to answer the referred question in favour of the revenue and against the assessee.

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, Amritsar Bench, dated 30.11.1993 in I.T.A. No.217(ASR)/1993. The assessment year in question is 1987-88. The dispute pertains to the deduction on account of expenses claimed by the assessee, Shri S.C. Nagpal, from the incentive bonus received as an employee (Development Officer) of the Life Insurance Corporation of India. The revenue is the Commissioner of Income Tax, Jalandhar.

What were the issues?

1. Whether on the facts and in the circumstances of the case, deduction on account of expenses at the rate of 40 per cent may be allowed from the amount of incentive bonus received by the assessee as an employee (Development Officer) of the Life Insurance Corporation of India? (Question of law) Assessee's Contention: The judgment does not record any specific arguments made by the assessee before the High Court. However, the reference itself implies the assessee sought to claim a 40% deduction. Revenue's Contention: The revenue contended that such a deduction should not be allowed. The judgment notes that the issue stands covered in favour of the revenue by previous judgments of the High Court.

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. I.T.R. No.74 of 1997 Date of decision: 02.11.2006 The Commissioner of Income Tax, Jalandhar. -----Applicants Vs. Shri S.C. Nagpal, Malout. -----Respondent CORAM:- HON'BLE MR JUSTICE ADARSH KUMAR GOEL HON'BLE MR JUSTICE RAJESH BINDAL Present: Dr. N.L. Sharda, Advocate for the revenue. ----- ORDER: 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 30.11.1993 in I.T.A. No.217(ASR)/1993 in respect of assessment year 1987-88:- “Whether on the facts and in the circumstances of the case, deduction on account of expenses at the rate of 40 per cent may be allowed from the amount of incentive bonus received by the assessee as an employee (Development Officer) of the Life Insurance Corporation 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, 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 02, 2006 ( RAJESH BINDAL ) ashwani JUDGE

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