Allahabad High Court
Commissioner Of Income-Tax vs M.S. Bagga on 15 March, 2005
Equivalent citations: [2006]284ITR577(ALL)
Bench: R.K. Agrawal, Prakash Krishna
JUDGMENT
1. The Income-tax Appellate Tribunal, Allahabad, has referred the following questions of law under Section 256(1) of the Income-tax Act, 1961, hereinafter referred to as "the Act", for opinion to this Court :
1. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that the incentive bonus paid to the Development Officer of Life Insurance Corporation of India is not chargeable to tax under the head 'Salary' ?
2. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that the incentive bonus earned by the Development Officers of LIC is business income and expenditure incurred in earning incentive bonus is an allowable deduction ?
2. The present reference relates to the assessment years 1984-85 and 1985-86.
3. Briefly stated the facts giving rise to the present reference are as follows :
4. The respondent-assessee is a Development Officer in Life Insurance Corporation of India, Kanpur. He has received incentive bonus and also incurred certain expenditure, which he claimed as deduction. The Income-tax Officer treated the incentive bonus as a part of the salary and disallowed the claim of expenditure. However, the Tribunal has held that the expenditure incurred in earning incentive bonus is allowable as deduction.
5. We have heard Sri A.N. Mahajan, learned standing counsel for the Revenue, and Sri R.S. Agrawal, learned Counsel appearing for the respondent-assessee.
6. In view of the decision of this Court in I. T. R. No. 30 of 1989, CIT v. Ganesh Chand Saxena , decided on December 22, 2004, a similar question has been answered in favour of the Revenue and against the assessee. We, accordingly, answer both the questions referred to us in the negative, i.e., in favour of the Revenue and against the assessee. However, there shall be no order as to costs.