I.t.t.a v. Commissioner Of Income Tax[[1

THE HON’BLE SRI JUSTICE L.NARASIMHA REDDYAND THE HON’BLE SRI JUSTICE CHALLA KODANDA RAMR.C.No.27 of 2002 ORDER:(Per the Hon’ble Sri Justice L.Narasimha Reddy) This reference under Section 256(1) of the Income Tax Act,1961, at the instance of the assessee, is made by the HyderabadBench ‘A’ of the Income Tax Appellate Tribunal, through its order,dated 04.02.2002 in R.A.No.290/Hyd/1996 inI.T.A.No.1700/Hyd/1993. The following questions were referred: 1.Whether, in the facts and circumstances of the casethe Tribunal is right in holding that the assessee isentitled only for allowance u/s16(1) and 40% of incentivebonus cannot be allowed u/s 10(14)?the Tribunal is right in holding that the assessee isentitled only for allowance u/s16(1) and 40% of incentivebonus cannot be allowed u/s 10(14)? 2.Whether in the facts and circumstances of the case,the Tribunal is right in not entertaining the plea of theassessee that such an adjustment cannot be done u/s143(1)(a) for the reason that it was not raised before thefirst appellate authority?”the Tribunal is right in not entertaining the plea of theassessee that such an adjustment cannot be done u/s143(1)(a) for the reason that it was not raised before thefirst appellate authority?” Heard learned counsel for the assessee and learned SeniorStanding Counsel for the Department. Both the questions are interrelated. They pertain to the mannerin which the incentive bonus that is given to the applicant herein byhis employer, must be treated. The Income Tax Officer disallowedthe claim of the applicant. The Commissioner, however, took theother view. The Tribunal took note of the precedents on the subjectand agreed with the view expressed by the Income Tax Officer. Recently, this Court dealt with the identical questions in I.T.T.A.No.75 of 2002 and following the judgments in K.A.Choudary v. Commissioner of Income Tax[[1]] and T.K.Ginarajan v. Commissioner of Income Tax[[2]], answered the questions againstthe assessee. Therefore, we answer both the questions against the assesseeand in favour of the Department. ____________________ L.NARASIMHA REDDY, J. _____________________ CHALLA KODANDA RAM, J. Date:24.07.2014GJ [1](1990) 183 ITR AP 29(1990) 183 ITR AP 29 [2](2013) 356 ITR 618 (SC)(2013) 356 ITR 618 (SC)