S.K.Jain, - (1.) THE assessee, Shri D.P. Raj Agrawal, is a Development Officer in employment of the Life Insurance Corporation of India, he had received incentive bonus and additional conveyance allowance from the Life Insurance Corporation of India. THE said income from incentive bonus and additional conveyance allowance has been assessed by the ITO in the A. Ys. 1980-81,1981-82 and 1982-83 under the head 'income from business and profession' and therefrom the ITO has allowed deduction of 40%, of about 56% and of about 52% on account of business expenses in the A. Ys. 1980-81,1981-82and 1982-83 respectively. THE said assessment orders were considered by the Commissioner of Income-tax as erroneous and prejudicial to the interest of the revenue. THE Commissioner was of the view that the amount of incentive bonus and additional conveyance allowance received by the assessee in the course of employment was income assessable under the head 'salary' and under no circumstances it could partake the character of income under the head 'business or profession'. He, therefore, set-aside the assessment orders and directed the ITO to make fresh assessments in accordance with the law after obtaining the particulars regarding the exact amount of bonus, etc. and considering the includibility of bonus in the income of salary with advertence to the observations made by him. Aggrieved by the said orders of the Commissioner of Income-tax, the assessee is in appeal.
(2.) Contention of the learned counsel for the assessee is that income from bonus and additional allowance to a Development Officer in employment of the Insurance Corporation has been treated by the Tribunal in several cases as not includible in income from salary. In support, he placed reliance upon the order of the Nagpur Bench of the Tribunal in the case of L.T. Mulchandani v. First ITO [1985] 22 TTJ (Nag.) 432 and the order of the Indore Bench of the Tribunal in the case of P.M. Nalvaya v. ITO [IT Appeal No. 838 (Ind.) of 1986, dated 30-3-1990]. It is further contended by the learned counsel that the assessment orders being in accordance with the orders of the Tribunal cannot be said to be erroneous. For this proposition, he placed reliance upon the case of Russel Properties (P.) Ltd. v. A. Chowdhury, Addl. CIT [1977] 109 ITR 229.
(3.) LEARNED Departmental Representative, on the other hand, contended that the ITO completed the assessments without proper inquiry, namely, as to what were the terms of employment of the assesses and under what terms and conditions of the contract of service the assessee was given incentive bonus by the employer ?;