Rajasthan High Court - Jaipur
Commissioner Of Income-Tax vs P.N. Verma (Shri), Development ... on 10 April, 2006
Equivalent citations: (2007)207CTR(RAJ)588, [2007]292ITR2259(RAJ), RLW2006(4)RAJ2803, 2006(4)WLC675
JUDGMENT Rajesh Balia, J.
1. The Tribunal has referred the following question of law along with statement of case by allowing the reference application of the revenue under Section 256(1) by holding that the said question is a question of law that arises out of the Tribunal's appellate order dated 30.11.1989 allowing the appeal of the respondent-assessee in relation to the Assessment Yr. 1984-85 in respect of the claim in question:
Whether in the facts and circumstances of the case, the Tribunal was right in holding that conveyance allowance of Rs.21,705/- received by the assessee from his employer was allowable Under Section 10(14) of the Act?
2. The respondent-assessee was serving as a Development Officer with the Life Insurance Corporation of India during relevant period and he had received additional conveyance allowance of Rs.21,705/- from his employer. The assessee had claimed this amount as not taxable in his hand under Section 10(14) of the Income Tax Act, 1961 as he had received such allowance as expenditure incurred wholly, necessarily and exclusively in the performance of duties of his office. The assessing officer has disallowed the claim only on the ground that the assessee has not produced any evidence in support of the fact that additional conveyance allowance received by him during the year for the purpose of his official duties, was actually utilized by him for that purpose.
3. This order was upheld by the CIT (Appeals), however, in the appeal before the Tribunal, on the basis of certificate issued by the LIC to the assessee and certain decisions, the Tribunal held that the additional conveyance allowance had been wholly, necessarily and exclusively spent by the assessee for the purpose of discharging his duties. In view of this Finding, the Tribunal, directed that deduction under Section 10(14) of the I.T. Act, 1961 be allowed to the assessee in respect of the additional conveyance allowance received by him during the year under consideration.
4. Apparently, allowing or disallowing of additional conveyance allowance received by the assessee from the employer was not dependent on any interpretation of the statute so as to give rise to any question of law, but was dependent on the finding of facts about utilization of such allowance by the recipient.
5. It is apparent from the statement of case that the matter about the actual utilization of additional conveyance allowance received by the assessee was wholly, necessarily and exclusively for the purposes of discharging his official duties. The finding which is required to be reached on the basis of evidence is a finding of fact and does not give rise to any question of law.
6. We are of the opinion that the Tribunal was not justified in referring the aforesaid question as a question of law under Section 256(1) arising from the order of the Tribunal in appeal. It was nowhere the question before any authority that additional conveyance allowance received by the assessee was not to be excluded from his income under Section 10(14). What was in contention was whether the condition about utilization of amount has been established by leading cogent evidence? The assessing officer has denied the claim of the assessee by saying that no evidence has been led in support of above. The Tribunal on the basis of certificate issued by the LIC has come to the conclusion that the amount has really been spent wholly, necessarily and exclusively for discharging his official duties.
7. This finding, in our opinion, found on the basis of material on record cannot be said to be perverse and based on irrelevant consideration and cannot be considered a question of law. As a matter of fact, on the findings of fact it was clearly a case falling within the ambit of Sub-section (14) of Section 10. The validity of finding of fact about utilization of amount received as special allowance has not been challenged on the ground on which a finding of fact is open to be questioned as a question of law, nor validity of such finding is subject of question referred. We may notice here that the expression "deduction by the authority of Income Tax Act" describing the claim of the assessee is a wrong nomenclature. Section 10 does not speak about the deduction, but speaks about "the income which does not fall within any of the clauses under Section 10 to be included in computing the total income of a previous year of the assessee."
8. Section 10(14)(i) reads that any such special allowance not being in the nature of a perquisite within the meaning of Clause (2) of Section 17, specifically granted to meet expenses wholly, necessarily and exclusively incurred in the performance of the duties of an office or employment of profit, to the extent to which such expenses are actually incurred for that purpose. .
9. Therefore, two conditions required for exclusion of the amount received as special allowance during the employment are that firstly, it must not have been granted to the assessee by way of perquisite but specifically granted to meet expenses wholly, exclusively and necessarily for the purpose of official duties. Secondly, it must have been actually used by the assessee for the purpose for which it has been granted. Both the conditions required for operation of Section 10(14) are the factual foundation on which Section 10(14) operates. The factual foundation establishes the exclusion of special allowance received by the assessee to meet such expenses to use the allowance for discharging his duties becomes non-includable in his income.
10. It is not the case of anyone that amount was received by the assessee as perquisite. Hence, it was a common ground that if the conditions specified in Section 10(14) are fulfilled, as a case of special allowance it is to be excluded from the computation of total income of the assessee. The assessee had received the amount to meet the expenses incurred for discharging of his office was also not the issue. The only other condition that was required to be satisfied was whether the assessee has actually used special allowance wholly exclusively and necessarily for discharging of his duty has been found by the Tribunal to be in favour of the assessee. The finding recorded in this context is finding of fact and does not give rise to any question of law.
11. Accordingly, we hold that the statement of case referred by the Tribunal does not give rise to any question of law at all, and the same is accordingly returned.