K.S.Vishwanathan, - (1.) THIS appeal, filed by the assessee is against the order of the CIT under Section 263 in respect of the assessment year 1986-87.
(2.) The assessee is working as Development Officer in LIC. During the accounting year relevant for the assessment year 1985-86, apart from his salary and conveyance allowance, he had also received Rs. 44,117 as Incentive Bonus. The assessee claimed that the conveyance allowance and the additional conveyance allowance both were exempt. He had also claimed that 50% of the Incentive Bonus should be excluded from the assessment. The returns were filed accordingly which is accepted by the ITO. The CIT was of the opinion that the order of the ITO is erroneous and prejudicial to revenue. He held that the assessee's claim for exemption under Section 10(74) in respect of additional conveyance allowance should be considered in the background of the instructions from the CBDT which was not done. With regard to the deduction of 50% of the Incentive Bonus the CIT held that the assessee, being an employee, was not entitled to any deduction other than the deduction under Section 16(0- Thus, he set aside the assessment order and directed the ITO to consider the admissibility of exemption under Section 10(74) only.
(3.) AGAINST this order, the assessee has come in appeal. It was seriously contended that the assessee has a swell role and had two sources of income. One was the salary from the LIC for which the assessee was given the conveyance allowance and additional conveyance allowance. He had also a business of increasing the insurance business for which he was remunerated by the Incentive Bonus. In respect of the Incentive Bonus, the claim for deduction was based on a Circular of the CBDT. He also relied upon a number of decisions of the Tribunal, where the Tribunal has considered similar contentions. In view of these, he submitted that there was no error in the order of the ITO.;