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C.I.T. v. Pramod Kumar Jain - INCOME TAX REFERENCE No. 75 of 1996  RD-AH 1130 (26 April 2005)
INCOME TAX REFERENCE NO.75 OF 1996
Commissioner of Income-tax, Agra. ....Applicant
Shri Pramod Kumar Jain, Agra. ...Respondent
Hon'ble R.K. Agrawal, J.
Hon'ble Rajes Kumar, J.
The Income Tax Appellate Tribunal, New Delhi has referred to following two question of law under section 256 (2) of the Income Tax Act, 1961, (hereinafter referred to as "the Act") for opinion of this Court.
"1. Whether on the facts and in the circumstances of the case, the Hon'ble ITAT was justified in law in sustaining the order of the first appellate authority that the assessee, a salaried employee of LIC was entitled to deduction at 50% ofn the incentive bonus received from his employer?
2. Whether on the facts and in the circumstances of the case, the Hon'ble ITAT was justified in law in holding that the assessee, a salaried employee of LIC of India, was entitled to deduction at 40% under section 10(4) of the I.T.Act, 1961 on the incentive bonus received from his employer ?"
The reference relates to the assessment year 1990-91.
Briefly stated, the facts giving rise to the present reference are as follows:
The assessee is a Deveopment Officer employed in Life Insurance Corporation of India, Agra. Return of income for assessment years 1990-91 was filed on 31.8.1990 at Rs.25,680/-. During the assessment proceedings, the Assessing Officer noticed that the assessee had received incentive bonus amounting to Rs.44,426/-. The assessee had shown this amount under head income from business or profession against this amount he claimed expenses to the tune of Rs.22,213/-. The claim was rejected by the Assessing Officer as in his view, the incentive bonus is a part of the salary and no deduction was allowable. The Deputy Commissioner of Income-tax (Appeals) vide his order dated 19.8.1991 deleted this addition which was confirmed by the Tribunal.
We have heard Sri A.N.Mahajan, learned Standing Counsel on behalf of the Revenue. No body has appeared on behalf of the respondent assessee
Sri A.N.Mahajan, learned Standing Counsel submitted that this Court in the I.T.R. No.93 of 1993 CIT, Kanpur Vs. Sri R.S.Nanda, Kanpur, decided on 15.03.2005 have decided similar questions of law in favour of the Revenue and against the respondent assessee.
Respectfully following the aforesaid decision, we answer the questions referred to us in the negative, i.e. in favour of the Revenue and against the respondent assessee
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