R.K. Gulati, J. - (1.) AT the instance of the Commissioner of Income-tax, Kanpur, the Income-tax Appellate Tribunal, Allahabad, has referred the following question of law for the opinion of this court, under Section 256(1) of the Income-tax Act, 1961 (for short "the Act") : "Whether, on the facts and in the circumstances of the case, and on a correct interpretation of Section 16 of the Income-tax Act, 1961, the Appellate Tribunal was justified in holding that the assessee was entitled to separate standard deductions in respect of each of the two employments ?"
(2.) WE have heard Sri R. K. Agarwal, learned standing counsel for the Income-tax Department. No one is present for the respondent-assessee, although the case was taken up in the revised list. The dispute pertains to the assessment year 1978-79. During the previous year relevant to the assessment year in question, the assessee received salary from two different employers. For the period June 1, 1977, to October 13, 1977, he received salary from J. C. Mills Ltd., Gwalior, and for the period October 15, 1977, to March 31, 1978, the salary was received from Elgin Mills Co. Ltd., Kanpur. In the assessment proceedings, the assessee claimed that in terms of Clause (i) of Section 16 of the Act, he was entitled to standard deduction of Rs. 3,500 in respect of the salary received from J. C. Mills Ltd., Gwalior, and to a separate standard deduction of Rs. 1,000 in respect of the salary received from the other employer. The Income-tax Officer, however, allowed one deduction and that too of Rs. 1,000 only. The assessee took the matter in appeal before the Assistant Commissioner of Income-tax. The appellate authority held that the assessee was entitled to the maximum standard deduction of Rs. 3,500 as contemplated under Section 16(i)(b) of the Act, inasmuch as the assessee had not received any conveyance allowance from his Gwalior employer. It was also held that as full deduction had been allowed, there was no question of allowing a further deduction of Rs. 1,000 in respect of the salary received from Elgin Mills Co. Ltd., Kanpur. The assessee pursued the matter further in appeal before the Income-tax Appellate Tribunal where his contention was accepted. The Tribunal expressed the view that the assessee was entitled to separate standard deductions of Rs. 3,500 and Rs. 1,000 in respect of the two employments. In giving that decision it relied upon a decision of the Bombay Bench of the Income-tax Appellate Tribunal. It is on these facts that the aforesaid question has been referred to this court for its opinion. It may be observed that by Section 6 of the Taxation Laws (Amendment) Act, 1984, Section 16 of the Act was amended retrospectively with effect from April 1, 1975, and in Clause (i) after the proviso, the following Explanation was inserted : "Explanation.--For the removal of doubts, it is hereby declared that where, in the case of an assessee, salary is due from, or paid or allowed by, more than one employer, the deduction under this Clause shall be computed with reference to the aggregate salary due, paid or allowed to the assessee and shall in no case exceed the amount specified under this clause."
(3.) IN view of the above amendment which was effected from April 1, 1975, it is clear that the standard deduction admissible under Section 16(i) is to be computed with reference to the aggregate amount of salary due, paid or allowed to the assessee, and such deduction is, in no case, to exceed the monetary ceiling specified in that Section. The amendment brought about in Section 16 is fully applicable to the case of the respondent-assessee, as we are concerned with the assessment year 1978-79. Thus the assessee was not entitled to separate deduction under Section 16(i) on the amount of salary received by him from more than one employer. The deduction under Section 16(i) was liable to be computed with reference to the aggregate salary due, paid or allowed to the assessee during the year relevant to the assessment year in question which could in no case be in excess of the amount specified in those provisions. We are supported, in our view, by two decisions of the Madhya Pradesh High Court in CIT v. P. S. Kalani [1986] 159 ITR 681 and in CIT v. S. C. Deora [1987] 167 ITR 682. The same view has been expressed by the other High Courts also, but it is not necessary to multiply the citations. In view of the above discussion, the question referred to this court is answered in the negative, in favour of the Revenue and against the assessee.;