Sri M Venkata Subbaiah, Ex MLA., Guntur v. The ITO, Ward-2(3)., Vijayawada

ITA 383/VIZ/2008 | 2002-2003
Pronouncement Date: 09-02-2010 | Result: Partly Allowed

Appeal Details

RSA Number 38325314 RSA 2008
Bench Visakhapatnam
Appeal Number ITA 383/VIZ/2008
Duration Of Justice 1 year(s) 6 month(s) 7 day(s)
Appellant Sri M Venkata Subbaiah, Ex MLA., Guntur
Respondent The ITO, Ward-2(3)., Vijayawada
Appeal Type Income Tax Appeal
Pronouncement Date 09-02-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted DB
Tribunal Order Date 09-02-2010
Assessment Year 2002-2003
Appeal Filed On 01-08-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV JUDICIAL MEMBER AND SHRI BR BASKARAN ACCOUNTANT MEMBER ITA NOS.381 TO 385/VIZAG/2008 ASSESSMENT YEARS : 2000-01 TO 2004-05 RESPECTIVELY M. VENKATA SUBBAIAH PESARLANKA ITO WARD-2(3) VIJAYAWADA (APPELLANT) VS. (RESPONDENT) PAN NO.AIGPM 4870Q ITA NO.264/VIZAG/2006 ASSESSMENT YEAR : 2003-04 P.V.V.P. KRISHNA RAO ELURU ACIT CIRCLE-1 ELURU (APPELLANT) VS. (RESPONDENT) PAN NO.AENPP 0155Q APPELLANT BY: SHRI C.V.S. MURTHY CA & SHRI G.V.N. HARI CA RESPONDENT BY: SHRI G.S.S. GOPINATH DR ORDER PER BENCH:- THESE APPEALS ARE PREFERRED BY DIFFERENT ASSESSEE S AGAINST THE RESPECTIVE ORDERS OF THE CIT(A). SINCE COMMON ISSU ES ARE INVOLVED IN THESE APPEALS THESE WERE HEARD TOGETHER AND ARE BEING DI SPOSED OFF THROUGH THIS CONSOLIDATED ORDER. 2. THE SOLE CONTROVERSY AROSE IN THESE APPEALS IS W ITH REGARD TO THE TAXABILITY OF THE SALARY AND DIFFERENT ALLOWANCES U NDER VARIOUS HEADS RECEIVED BY THE MLAS (MEMBER OF LEGISLATIVE ASSEMBLIES). TH E FACTS AVAILABLE ON RECORD ARE THAT THE ASSESSEES HAVE RECEIVED THE SAL ARY AND CONSTITUENCY ALLOWANCE CONVEYANCE ALLOWANCE TELEPHONE ALLOWANC E CLERICAL ALLOWANCE MEDICAL ALLOWANCE AND CONTINGENCY ALLOWANCE. THE A SSESSING OFFICER TAXED THE SALARY AND OTHER ALLOWANCES EXCEPT THE DAILY AL LOWANCE OVER AND ABOVE RS.24 000/- IN ALL WHICH WERE EXCLUDED U/S 10(17) OF THE INCOME TAX ACT (HEREIN AFTER CALLED AS AN ACT) UNDER THE HEAD INC OME FROM OTHER SOURCES. 2 THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) WITH THE SUBMISSIONS THAT ONCE THE INCOME UNDER THE HEAD SALARY AND OTHE R ALLOWANCES ARE TO BE ASSESSED TO TAX UNDER THE HEAD INCOME FROM OTHER S OURCES THE NECESSARY EXPENDITURES INCURRED IN EARNING THAT INCOME IS TO BE ALLOWED AND ONLY A NET PROFIT IS TO BE TAXED AND NOT THE ENTIRE RECEIPT. 3. THE CIT(A) EXAMINED THE ISSUE IN THE LIGHT OF VA RIOUS JUDGEMENTS BUT WAS NOT CONVINCED WITH THE CONTENTIONS OF THE ASSES SEES AND HE CONFIRMED THE DISALLOWANCE AFTER HAVING OBSERVED THAT THE APP ELLANT HAS FAILED TO ESTABLISH ANY NEXUS THAT SUCH EXPENDITURE HAS BEEN INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF MAKING OF EARNING SU CH INCOME. 4. NOW THE ASSESSEE IS BEFORE US. DURING THE COURS E OF HEARING OF THE APPEAL THE LD. COUNSEL FOR THE ASSESSEE HAS INVITE D OUR ATTENTION TO THE FACT THAT AN MLA WHO IS ELECTED BY THE PUBLIC HAS GOT A BOUNDEN DUTY TO MOVE FROM PLACE TO PLACE IN HIS CONSTITUENCY ENQUIRE TH E DIFFICULTIES OF THE PEOPLE IN ORDER TO RECOMMEND THE NECESSARY HELP OR BENEFIT S TO BE DONE TO THE PUBLIC IN HIS CONSTITUENCY TO THE GOVERNMENT. IN THIS PROCESS HE HAD TO INCUR LOT OF EXPENDITURE ON ACCOUNT OF MOVING FROM ONE PLACE TO ANOTHER AND ALSO SPEAKING WITH VARIOUS IMPORTANT VILLAGE HEADS GOVERNMENT OFFICERS IN HIS CONSTITUENCY. HE HAD TO INCUR TELEPHONE EXPENSES CONVEYANCE EXPENSES AND ALSO IN ORDER TO MAKE CORRESPONDENCE WITH GOVERNMEN T OFFICERS IN HIGH POSITIONS THE MLA ALSO NEEDS A CLERICAL ASSISTANCE FOR HIS WORK. IN VIEW OF THESE FACTS THAT THE ASSESSEE HAD TO NECESSARILY IN CUR SO MUCH OF EXPENDITURE AND THE GOVERNMENT IS GRANTING VARIOUS ALLOWANCES T O MEET SUCH EXPENDITURE BY FIXING CERTAIN LIMITS. IT MEANS THAT GOVERNMENT WHILE GRANTING FIXED ALLOWANCES ITSELF IS AWARE THAT IMMEDIATE EXPENDITU RE THAT ONE HAS TO INCUR FOR THE SAID PURPOSES THAT WERE MENTIONED ABOVE. I N FACT IN MOST OF THE CASES SUCH ALLOWANCES GRANTED BY THE GOVERNMENT AR E NOT SUFFICIENT TO MEET THE SAID EXPENSES AND SOMETIMES OWN FUNDS BESIDES V ARIOUS ALLOWANCES GRANTED BY THE GOVERNMENT TO BE UTILIZED TO KEEP UP THE REPUTATION AND FUTURE POSITION IN THE CONSTITUENCY OF AN MLA. IT MEANS THAT THE ASSESSEE HAD TO INCUR AND HAS INCURRED SO MUCH OF EXPENDITUR E AND SUCH EXPENDITURE WAS BEING REIMBURSED IN THE FORM OF ALLOWANCE BY TH E GOVERNMENT. 3 5. THE LD. COUNSEL FOR THE ASSESSEE FURTHER CONTEND ED THAT UNDER THE IDENTICAL CIRCUMSTANCES WHEN REIMBURSEMENT TOWARDS MEDICAL EXPENDITURE TO AN MLA WAS BROUGHT TO TAX BY TREATING IT AS A PERQU ISITE BY THE ASSESSING AUTHORITY THE HON'BLE HIGH COURT OF RAJASTHAN IN T HE CASE OF CIT VS. SHIVCHARAN MATHUR 13 DTR (RAJ) 64 HAS HELD THAT THE MLA HAVING BEEN ELECTED AND NOT EMPLOYED U/S 15 IS NOT ATTRACTED IN RESPECT OF REMUNERATION RECEIVED BY HIM AND AS A NECESSARY COROLLARY APPLI CABILITY OF SECTION 17(2) CLAUSE 4 IS ALSO RULED OUT IN RESPECT OF REIMBURSEM ENT OF MEDICAL EXPENSES. IT WAS SUBMITTED THAT THE ENTIRE ALLOWANCES THAT WE RE GRANTED TO THE ASSESSEES HAVE BEEN SPENT AND SINCE ONLY PROFIT OR SURPLUS IS TO BE BROUGHT TO TAX UNDER THE HEAD INCOME FROM BUSINESS/PROFIT OR U NDER THE HEAD INCOME FROM OTHER SOURCES THE SURPLUS OUT OF THE ALLOWANC ES ONLY SHOULD BE TAXED. 6. THE LD. COUNSEL FOR THE ASSESSEE HAS ALSO PLACED A RELIANCE UPON THE VARIOUS ORDERS PASSED BY THE TRIBUNAL ON THE IMPUGN ED ISSUE AND ALSO OF THE HIGH COURT WHICH ARE AS UNDER: 1) SHRI BIJJAM PARTHASARATHI REDDY VS. ACIT ITA NO.115 8/HYD/06 & 1159/HYD/06 DECIDED ON 28.2.2008. 2) SHRI N. INDRASENA REDDY VS. ITO ITA NO.218 & 219/H YD/05 DECIDED ON 31.1.2006. 3) SHRI P. KISTA REDDY VS. DCIT ITA NO.377 & 378/HYD/2 008 DECIDED ON 23.7.2009. 4) SHRI Y. YELLA REDDY VS. ITO 754 TO 758/HYD/2008 DEC IDED ON 4.7.2008. 5) SHRI R. RAVINDRANATH REDDY VS. ITO 1136 TO 1139/HYD /2008 DECIDED ON 23.7.2009 6) JASWANT SINGH VS. ITO ITA NO.731/INDORE/2002 96 TTJ 660 7) CIT VS. MADDI SUDARSANAM 174 ITR 659 7. THE LD. COUNSEL FOR THE ASSESSEE FURTHER CONTEND ED THAT IN THE AFORESAID ORDERS THE TRIBUNAL HAS REPEATEDLY HELD FOLLOWING THE JUDGEMENT OF JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. MA DDI SUDARSANAM (SUPRA) THAT THE MLA HAS TO NECESSARILY MAINTAIN HIS OFFICE AND ONLY FOR THAT PURPOSE THE ALLOWANCE HAS BEEN GRANTED TO HIM FOR THE DAY T O DAY EXPENSES THAT WOULD CERTAINLY OCCUR FOR ANY LEGISLATURE. IT WAS ACCORDINGLY HELD THAT HE IS ENTITLED TO BENEFIT OF EXEMPTION U/S 10(14) OF THE I.T. ACT. 4 8. THE LD. D.R. ON THE OTHER HAND HAS EMPHATICALLY ARGUED THAT ONLY THOSE ALLOWANCE GIVEN TO THE MLAS ARE EXEMPTED WHI CH ARE SPECIFICALLY MENTIONED IN SECTION 10(17) OF THE ACT. ACCORDING TO THE SECTION 10(17) OF THE ACT DAILY ALLOWANCES RECEIVED BY THE MLAS ARE TO BE EXEMPTED FROM THE INCOME OF THE ASSESSEES. LATER ON THE AMENDMENT W AS MADE BY THE FINANCE ACT 2006 W.E.F. 1.4.2007 ACCORDING TO WHICH CONST ITUENCY ALLOWANCE RECEIVED BY THE MLAS WAS ALSO EXEMPTED. MEANING TH EREBY THE LEGISLATURE IS QUITE CONSCIOUS ABOUT THE ALLOWANCES WITH REGARD TO WHICH EXEMPTION IS TO BE GRANTED. INITIALLY THEY ALLOWED THE EXEMPTION OF THE DAILY ALLOWANCES AND OTHER ALLOWANCES NOT EXCEEDING RS.2000/- P.M. TO TH E MLAS BUT AFTER RECEIVING REPRESENTATION FROM VARIOUS STATE GOVERNM ENTS THE PARLIAMENT HAS MADE THE NECESSARY AMENDMENTS BY INSERTING CLAUSE 3 W.E.F. 1.4.2007 AND GRANTED THE EXEMPTION OF THE CONSTITUENCY ALLOWANCE GIVEN TO THE MLAS LIKE THE MPS. WHEN SPECIFIC PROVISION IS THERE TO GRANT THE EXEMPTION OF PARTICULAR TYPE OF ALLOWANCES THE GENERAL PROVISION OF SECTIO N 10(14) CANNOT BE INVOKED. ACCORDINGLY HE PLACED HEAVY RELIANCE UPO N THE ORDER OF THE CIT(A). 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND VARIOUS ORDERS/JUDGEME NTS REFERRED TO BY THE ASSESSEES. WE HAVE CAREFULLY EXAMINED THE VARIOUS ORDERS OF THE TRIBUNAL PASSED ON THIS SUBJECT AND WE FIND THAT DIFFERENT B ENCHES OF THE TRIBUNAL HAVE HELD IN ONE VOICE THAT THE SALARY GIVEN TO THE MLAS CANNOT BE ASSESSED UNDER THE HEAD SALARY. IT IS RATHER AN INCOME FROM OTHER SOURCES. THE ISSUE REGARDING NATURE OF RECEIPT WAS EXAMINED BY THE RAJ ASTHAN HIGH COURT IN THE CASE OF CIT VS. SHIVCHARAN MATHUR (SUPRA) AND HAS C ATEGORICALLY HELD THAT THE FUNDAMENTAL REQUIREMENT FOR ATTRACTING SECTION 15 I S THAT THERE SHOULD BE A RELATIONSHIP OF EMPLOYER AND EMPLOYEE WHETHER IN EX ISTENCE OR IN THE PAST. OBVIOUSLY AND NECESSARILY IN THE VERY NATURE OF THI NGS FOR BRINGING ABOUT SUCH RELATIONSHIP THE ASSESSEE BEING THE PERSON CONCER NED EMPLOYED BY THE EMPLOYER AND HAS A NECESSARY COROLLARY THE EMPLOYE R SHOULD HAVE RIGHT TO DISCHARGE OR TERMINATE THE EMPLOYEE. THE BASIC ING REDIENT IS MISSING IN THE CASE OF MLAS AND MPS AS THEY ARE NOT EMPLOYED BY AN YBODY RATHER THEY ARE ELECTED BY THE PUBLIC FORMING THEIR ELECTION CONSTI TUENCIES AND IN CONSEQUENT 5 UPON SUCH ELECTION THAT THEY ACQUIRE CONSTITUENCY P OSITION AND DISCHARGE CONSTITUENCY FUNCTIONS AND OBLIGATIONS. MAY BE TH AT THEY RECEIVE REMUNERATIONS AFTER SWEARING IN BUT THAT CANNOT BE SAID TO BE THE SALARY WITHIN THE MEANING OF SECTION 15. THEREFORE THE R EMUNERATIONS RECEIVED BY THE MLAS & MPS CANNOT BE TAXED UNDER THE HEAD INCOM E FROM SALARY BUT CAN ONLY BE TAXED UNDER THE HEAD INCOME FROM OTHER SOUR CES. THEREFORE THERE IS NO CONTROVERSY IN THIS REGARD AND FOLLOWING THE AFO RESAID ORDERS WE HOLD THAT IN THE INSTANT CASE THE REVENUE HAS RIGHTLY TREATE D THE REMUNERATION RECEIVED BY THE ASSESSEE MLAS UNDER THE HEAD INCOME FROM OT HER SOURCES. 10. WITH REGARD TO ANOTHER ISSUE WHETHER THE PROVIS IONS OF SECTION 10(14) OF THE ACT CAN BE INVOKED FOR OTHER ALLOWANCES GIVE N TO THE MLAS IN THE INSTANT CASE WE FIND THAT THE VARIOUS BENCHES OF T HE TRIBUNALS IN THE AFORESAID CASES HAVE CATEGORICALLY HELD IN ONE STRE AM THAT ASSESSEE IS ENTITLED TO THE BENEFIT OF EXEMPTION U/S 10(14) OF THE I.T. ACT FOLLOWING THE JUDGEMENTS OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. MADDI SUDARSANAM (SUPRA) IN WHICH IT HAS BEEN HELD THAT S ECTION 10(14) PROVIDES THAT ANY SPECIAL ALLOWANCE OR BENEFIT SPECIFICALLY GRANTED TO MEET EXPENSES WHOLLY NECESSARILY AND EXCLUSIVELY INCURRED IN THE PERFORMANCE OF THE DUTIES OF AN OFFICE OR EMPLOYMENT OF PROFIT TO THE EXTENT TO WHICH SUCH EXPENSES ARE ACTUALLY INCURRED FOR THAT PURPOSE WOULD BE EX EMPT. THEIR LORDSHIP FURTHER IN THAT CASE HELD THAT THE EXTENT OF EXPENS ES NOT ACTUALLY INCURRED FOR THE PURPOSE WOULD NOT EARN EXEMPTION. THE LANGUAGE OF SECTION 10(14) WOULD CLEARLY SHOW THAT ANY SPECIAL ALLOWANCE OR BE NEFIT SPECIFICALLY GRANTED TO MEET EXPENSES WHOLLY NECESSARILY AND EXCLUSIVEL Y INCURRED IN THE PERFORMANCE OF DUTIES OF AN OFFICE OR AN EMPLOYMENT OF PROFIT WOULD BE EXEMPT. THE SECTION 10(14) DOES NOT USE THE EXPR ESSION OFFICE OF PROFIT. THE EXPRESSION USED IS OFFICE OR EMPLOYMENT OF PRO FIT. THE EXPRESSION OF PROFIT QUALIFIES ONLY EMPLOYMENT AND DOES NOT QU ALIFY OFFICE. IT IS ENOUGH IF A PERSON IS HOLDING AN OFFICE AND FOR THE PURPOS E OF PERFORMING THE DUTIES ASSOCIATED WITH HIS OFFICE IS GRANTED AN ALLOWANCE OR BENEFIT SPECIFICALLY TO MEET THE EXPENSES. IN THE CASE OF AN MLA HE MAY N OT BE HOLDING AN EMPLOYMENT OF PROFIT BUT HE IS CERTAINLY HOLDING AN OFFICE OF MLA AND AS SUCH WHATEVER ALLOWANCES OR BENEFIT GRANTED TO IT TO MEE T THE PARTICULAR EXPENSES 6 HE IS ENTITLED FOR EXEMPTION UPTO THE APPLICABILITY OF SECTION 10(14) OF THE I.T. ACT TO THE ALLOWANCES GRANTED TO THE ASSESSEE MLAS. THERE IS NO DIFFERENCE IN ANY OF THE AFORESAID ORDERS OF THE TRIBUNALS WIT H REGARD TO APPLICABILITY OF SECTION 10(14) OF THE ACT. 11. THE ONLY DIFFERENCE OF THE OPINION IS WITH REGA RD TO THE ALLOWABILITY OF THE EXPENSES. IN THE CASE OF SHRI N. INDRASENA RED DY (SUPRA) THE TRIBUNAL HAS HELD THAT THE MLA IS HOLDING AN OFFICE THOUGH N OT ON OFFICE OF PROFIT AND SECTION 10(14) OF THE ACT WOULD APPLY TO HIS CASE. HOWEVER THE EXPENSES WHICH ARE EXEMPT ARE REQUIRED TO BE PRESCRIBED BY T HE COMPETENT AUTHORITIES AND THE ASSESSEE IS REQUIRED TO FILE THE EVIDENCE T HAT SUCH EXPENDITURE HAS ACTUALLY BEEN INCURRED BY HIM AND FOR THAT PURPOSE THE ALLOWANCES AND ITS EXPENSES ARE TO BE GOVERNED BY RULE 2BB (1) OF THE I.T. RULES. IN ORDER TO ESTABLISH THAT THE ALLOWANCES GRANTED TO THE ASSESS EES WERE SPENT FOR A PARTICULAR PURPOSE TO WHICH IT WAS GRANTED THE ASS ESSEE IS REQUIRED TO FILE SOME EVIDENCE TO THE SATISFACTION OF THE ASSESSING OFFICER. IN THAT CASE SINCE THE ASSESSEE DID NOT FILE ANY DOCUMENTARY EVIDENCE IN SUPPORT OF THE EXPENDITURE INCURRED THE TRIBUNAL HELD THAT ASSESS EE WAS NOT ENTITLED TO THE EXEMPTION U/S 10(14) OF THE ACT OF THOSE EXPENSES W HICH ARE COVERED AS PER RULE 2BB(1) OF THE I.T. RULES. THIS ORDER WAS FOLL OWED BY ANOTHER BENCH IN THE CASE OF SHRI B. PARTHASARATHI REDDY VS. ACIT (S UPRA) BUT WHILE ALLOWING THE ENTIRE CLAIM THE BENCH HAS NOT DISCUSSED THE P ROVISIONS OF RULE 2BB AS DISCUSSED BY THE TRIBUNAL IN ITS EARLIER ORDER IN T HE CASE OF N. INDRASENA REDDY AND THE TRIBUNAL HAS DIRECTED THE A.O. TO ALL OW DEDUCTIONS IN RESPECT OF THE ALL ALLOWANCES GIVEN TO THE ASSESSEES. THER EAFTER OTHER ORDER OF THE SAME BENCH WAS PASSED IN THE CASE OF SHRI P. KISTA REDDY (SUPRA) IN WHICH THE TRIBUNAL HAS FOLLOWED THE ORDER OF ITS BENCH IN THE CASE OF B. PARTHASARATHI REDDY AND ALLOWED THE ENTIRE CLAIM OF ALLOWANCES GIVEN TO THE ASSESSEES WITHOUT REALIZING AS TO WHY THE PROVISION S OF RULE 2BB ARE NOT APPLICABLE WHILE GRANTING THE EXEMPTION U/S 10(14). THE SIMILAR WAS THE POSITION IN THE CASE OF R. RAVINDRANATH REDDY IN WH ICH THE SMC BENCH HAS ALSO FOLLOWED THE CASE OF B. PARTHASARATHI REDDY. WHEREAS THE OTHER SMC BENCH OF THE TRIBUNAL IN THE CASE OF Y. YELLA REDDY VS. ITO (SUPRA) HAS DIRECTED THE A.O. TO VERIFY THE GENUINENESS OF THE EXPENDITURE CLAIMED BY THE 7 ASSESSEE IN CONNECTION WITH THE PERFORMANCE OF DUTI ES OF HIS OFFICE AS MLA AND TO ALLOW DEDUCTIONS OF EXPENDITURE AFTER DUE VE RIFICATIONS. 12. NOW THE QUESTION POSED BEFORE US IN THE LIGHT O F THESE AFORESAID ORDERS OF THE TRIBUNAL WHETHER THE COMPLIANCE OF RULE 2BB IS IMPOSED WHILE ALLOWING AN EXEMPTION U/S 10(14) OF THE I.T. ACT. IN THIS R EGARD WE EXTRACT THE PROVISIONS OF RULE 2BB AS UNDER:- 2BB (1) FOR THE PURPOSES OF SUB-CLAUSE (I) OF CLAU SE (14) OF SECTION 10 PRESCRIBED ALLOWANCES BY WHATEVER NAME CALLED SHALL BE THE FOLLOWING NAMELY:- (A) ANY ALLOWANCE GRANTED TO MEET THE COST OF TRAVEL ON TOUR OR ON TRANSFER. (B) ANY ALLOWANCE WHETHER GRANTED ON TOUR OR FOR THE PERIOD OF JOURNEY IN CONNECTION WITH TRANSFER TO MEET THE OR DINARY DAILY CHARGES INCURRED BY AN EMPLOYEE ON ACCOUNT OF ABSEN CE FROM HIS NORMAL PLACE OF DUTY; (C) ANY ALLOWANCE GRANTED TO MEET THE EXPENDITURE INCUR RED ON CONVEYANCE IN PERFORMANCE OF DUTIES OF AN OFFICE OR EMPLOYMENT OF PROFIT: PROVIDED THAT FREE CONVEYANCE IS NOT PROVIDED BY THE EMPLOYER. (D) ANY ALLOWANCE GRANTED TO MEET THE EXPENDITURE INCUR RED ON A HELPER WHERE SUCH HELPER IS ENGAGED FOR THE PERFORM ANCE OF THE DUTIES OF AN OFFICE OR EMPLOYMENT OF PROFIT; (E) ANY ALLOWANCE GRANTED FOR ENCOURAGING THE ACADEMIC RESEARCH AND TRAINING PURSUITS IN EDUCATIONAL AND RESEARCH I NSTITUTIONS. (F) ANY ALLOWANCES GRANTED TO MEET THE EXPENDITURE INCU RRED ON THE PURCHASE OR MAINTENANCE OF UNIFORM FOR WEAR DUR ING THE PERFORMANCE OF THE DUTIES OF AN OFFICE OR EMPLOYMEN T OF PROFIT. EXPLANATION: FOR THE PURPOSE OF CLAUSE (A) ALLOWA NCE GRANTED TO MEET THE COST OF TRAVEL ON TRANSFER INCLUDES ANY S UM PAID IN CONNECTION WITH TRANSFER PACKING AND TRANSPORTATIO N OF PERSONAL EFFECTS ON SUCH TRANSFER. 13. IN ORDER TO ASCERTAIN WHETHER THE SPECIAL ALLOW ANCES OR THE BENEFITS OTHER THAN THE PERQUISITES FORMS PART OF THE TOTAL INCOME DEFINED IN SECTION 2(24) OF THE ACT WE HAVE TO CAREFULLY EXAMINE THE PROVISIONS OF SEC.2(24) OF THE ACT. SEC.2(24)OF THE ACT DEFINES THE INCOME OF THE ASSESSEE AND IT INCLUDES DIFFERENT TYPE OF RECEIPTS. AS PER CLAUSE (IIIA) OF THIS DEFINITION INCOME INCLUDES ANY SPECIAL ALLOWANCE OR BENEFIT OT HER THAN THE PERQUISITES INCLUDED UNDER SUB-CLAUSE (III) OF THIS SUB-SECTION SPECIFICALLY GRANTED TO THE 8 ASSESSEE TO MEET EXPENSES WHOLLY NECESSARILY AND E XCLUSIVELY FOR THE PERFORMANCE OF THE DUTIES OF AN OFFICE OR EMPLOYMEN T OF PROFIT. IN ORDER TO BRING THE SPECIAL ALLOWANCES WITHIN THE FOLD OF INC OME THE SUB CLAUSE (IIIA) WAS INSERTED BY THE DIRECT TAX LAWS AMENDMENT ACT 1989 RETROSPECTIVELY W.E.F. 1 ST APRIL 1962. THIS ALLOWANCES WHICH THE LEGISLATUR E ENTITLED TO SHOWER THE BENEFICIAL TREATMENT MAY BE SEEN IN SECTION 10( 14). THUS ALL THOSE SPECIAL ALLOWANCES OTHER THAN THOSE SPECIFICALLY EX EMPT WOULD BE TAXED AS AN INCOME OF THE ASSESSEES. WE HAVE ALSO EXAMINED THE PROVISIONS OF SECTION 10(14) AND RULE 2BB OF THE I.T. RULES AND WE FIND T HAT RULE 2BB IS SUPPLEMENT TO SECTION 10(14) OF THE ACT AND IT PUTS A CAP ON T HE QUANTUM OF THE ALLOWANCE OR BENEFIT GRANTED TO THE ASSESSEES. IN SECTION 10(14) A GENERAL REFERENCE WAS MADE WITH REGARD TO THE SPECIAL ALLOW ANCES BUT THE NATURE OF THE ALLOWANCES WERE NOT SPELLED OUT IN THAT SECTION . THIS LEFT OVER WORK IS DONE BY RULE 2BB IN WHICH THE SPECIAL ALLOWANCES WE RE IDENTIFIED AND THEIR QUANTUM OF EXEMPTION FROM TAX WAS ALSO FIXED TO THE EXTENT AS NOTIFIED IN THE NOTIFICATION. THESE EXEMPTIONS IS IN RESPECT OF AF ORESAID SPECIAL ALLOWANCES TO THE EXTENT TO WHICH THE SAID EXPENSES ARE ACTUALLY INCURRED IN THAT PURPOSE. 14. THE SUB CLAUSE 1 OF SECTION 10(14) GRANTS EXEMP TION IN RESPECT OF ANY SPECIAL ALLOWANCE OR BENEFIT NOT BEING THE NATURE OF PERQUISITE WITHIN THE MEANING OF CLAUSE (2) OF SECTION 17 SPECIFICALLY G RANTED TO MEET THE EXPENSES WHOLLY NECESSARILY AND EXCLUSIVELY INCURR ED IN THE PERFORMANCE OF DUTIES OF AN OFFICE OR EMPLOYMENT OF PROFIT AS MAY BE PRESCRIBED TO THE EXTENT TO WHICH SUCH EXPENSES ARE ACTUALLY INCURRED FOR TH AT PURPOSE. THE SUB CLAUSE (II) GRANTS EXEMPTION IN RESPECT OF ANY ALLO WANCE GRANTED TO THE ASSESSEES EITHER TO MEET HIS PERSONAL EXPENSES AT T HE PLACE WHERE THE DUTIES OF HIS OFFICE OR EMPLOYMENT OF PROFIT OR ORDINARILY PERFORMED BY HIM OR THE PLACE WHERE HE ORDINARILY RESIDES OR TO COMPENSATE THE ASSESSEES FOR THE INCREASED COST OF LIVING. THE ALLOWANCES SHALL BE ONE WHICH IS PRESCRIBED AND THE EXEMPTION SHALL BE TO THE EXTENT AS MAY BE PRES CRIBED. RULE 2BB HAS PRESCRIBED THE ALLOWANCE AS WELL THE AMOUNT EXEMPT U/S 10(14)(II). FROM 1 ST APRIL 1989 TO 30 TH JUNE 1995 THE SAID ALLOWANCES HAD TO BE ONE SPECI FIED BY THE CENTRAL GOVERNMENT AND QUANTUM OF EXEMPTION WAS TO THE EXTENT SPECIFIED IN THE CONCERNED NOTIFICATION. SECTION 14 DEALS WITH 2 TYPES OF 9 ALLOWANCES (1) SUCH ALLOWANCES OR BENEFIT NOT BEING THE NATURE OF THE PERQUISITE WITHIN THE MEANING OF CLAUSE (2) OF SECT ION 17 SPECIFICALLY GRANTED TO MEET EXPENSES WHOLLY NECESSARILY AND EXCLUSIVEL Y INCURRED IN THE PERFORMANCE OF THE DUTIES OF AN OFFICE OR AN EMPLOY MENT OF PROFIT AS MAY BE PRESCRIBED TO THE EXTENT TO WHICH SUCH EXPENSES ARE ACTUALLY INCURRED FOR THAT PURPOSE. (2) ANY SUCH ALLOWANCES GRANTED TO THE ASS ESSEES EITHER TO MEET HIS PERSONAL EXPENSES AT THE PLACE WHERE THE DUTIES OF HIS OFFICE OR EMPLOYMENT OF PROFIT ARE ORDINARILY PERFORMED BY HIM OR AT THE PLACE WHERE HE ORDINARILY RESIDES OR TO COMPENSATE HIM FOR THE INCREASED COST OF LIVING. THE SPECIAL ALLOWANCES OR THE BENEFITS PRESCRIBED IN CLAUSE 1 A RE TO BE GOVERNED BY SUB RULE 1 OF RULE 2BB IN WHICH THE SPECIAL ALLOWANCES WERE IDENTIFIED AND ARE ALSO ALLOWED TO BE EXEMPTED TO THE EXTENT TO MEET THE EX PENDITURES INCURRED FOR THAT PURPOSE. WHEREAS SUB CLAUSE (2) OF CLAUSE 14 OF SECTION 10 IS GOVERNED BY SUB RULE (2) OF RULE 2BB IN WHICH THE ALLOWANCES WERE ALSO IDENTIFIED BUT THEY WERE ALLOWED TO BE EXEMPTED UPTO A PARTICULAR LIMIT. AS PER SUB RULE (2) THE EXEMPTION OF ALLOWANCE IS LIMITED IRRESPECTIVE OF THE FACT THAT THE ENTIRE ALLOWANCE WAS SPENT OR NOT FOR THE PURPOSE TO WHICH IT WAS GRANTED. 15. IN THE CASE OF COAL MINES OFFICERS ASSOCIATION OF INDIA VS. UOI AND OTHERS 181 ITR 346 MP IT WAS HELD THAT ANY PARTICUL AR ALLOWANCE UNLESS IT IS NOTIFIED BY THE CENTRAL GOVERNMENT FOR ITS EXEMPTIO N U/S 10(14) READ WITH RULE 2BB IT CANNOT BE ALLOWED TO BE EXEMPTED. MEAN ING THEREBY THAT THE ALLOWANCE SHALL BE ONE WHICH IS PRESCRIBED AND THE EXEMPTION SHALL BE TO THE EXTENT AS MAY BE PRESCRIBED. RULE 2BB HAS PRESCRI BED THE ALLOWANCES AS WELL AS THE AMOUNT EXEMPT UNDER SECTION 10(14)(II) [FROM 1 ST APRIL 1989 TO 30 TH JUNE 1995 THE SAID ALLOWANCE HAD TO BE ONE SPECI FIED BY THE CENTRAL GOVT. AND THE QUANTUM OF EXEMPTION WAS TO THE EXTEN T SPECIFIED IN THE CONCERNED NOTIFICATION.] IT HAS ALSO BEEN CLARIFIED THROUGH VARIOUS JUDICIAL PRONOUNCEMENTS THAT IN ORDER TO AVAIL THE EXEMPTION UNDER THIS CLAUSE THE ASSESSEE HAS TO PROVE THAT THE EXPENDITURE IN RESPE CT OF WHICH SPECIAL ALLOWANCE OR BENEFIT WAS GRANTED HAS BEEN INCURRED WHOLLY NECESSARILY AND EXCLUSIVELY IN THE PERFORMANCE OF HIS DUTIES OF AN OFFICE OR EMPLOYMENT OF PROFIT. THE REQUIREMENT OF `WHOLLY NECESSARILY AN D EXCLUSIVELY IS CUMULATIVE AND NOT ALTERNATIVE. ASSESSEE MUST ESTABLISH THAT HE IS REQUIRED TO SPEND 10 SUCH SPECIAL ALLOWANCE OR BENEFIT NOT ONLY WHOLLY B UT ALSO NECESSARILY AND EXCLUSIVELY IN THE PERFORMANCE OF HIS DUTIES. IN THE CASE OF J.G. MANKED VS. CIT 55ITR 448 (GUJ.) ASSESSEE WHO WAS PRACTISING CH ARTERED ACCOUNTANT WAS APPOINTED AS A PART TIME PROFESSOR IN A COLLEGE SIT UATED AT ANOTHER PLACE. HE WAS PAID A CERTAIN MONTHLY SALARY INCLUDING TRAVELL ING ALLOWANCES AND ALL OTHER ALLOWANCES. THE GUJARAT HIGH COURT HELD THAT ASSES SEE WAS NOT ENTITLED TO CLAIM EXEMPTION U/S 4(3)(VI) OF 1922 ACT (CORRESPON DING TO SECTION 10(14) OF THE I.T. ACT 1961) AS IT FELT THAT THE SAID TRAVE LLING ALLOWANCE WAS NOT A SPECIAL ALLOWANCE OR BENEFIT GRANTED TO THE ASSESSE ES MUCH LESS SPECIFICALLY GRANTED TO MEET THE EXPENSES OF TRAVELLING. 16. WE THEREFORE OF THE VIEW THAT WHILE DEALING WIT H THE ISSUE OF SPECIAL ALLOWANCES GIVEN TO THE ASSESSEES ONE HAS TO EXAMIN E THE PROVISION OF SECTION 2(24) & 10(14) OF THE I.T. ACT AND RULE 2BB OF THE I.T. RULES. AS PER SECTION 2(24) ALL ALLOWANCES FORMS PART OF THE INCO ME OF THE ASSESSEES. SECTION 10(14) DEALS WITH THE EXEMPTION OF CERTAIN SPECIAL ALLOWANCES AND RULE 2BB IDENTIFY THE ALLOWANCES AND THEIR LIMIT OF EXEMPTION FROM TAX. 17. SO FAR AS PROOF OF ACTUAL EXPENDITURE OF THE AL LOWANCES ARE CONCERNED WE HAVE EXAMINED THE VARIOUS JUDGEMENTS INCLUDING T HE JUDGEMENT OF THE APEX COURT IN THE CASE OF CIT VS. TEJAJI FARASHRAN KARAWALA LTD. 67 ITR 1995 (SC) IN WHICH IT HAS BEEN OBSERVED THAT TO QUALIFY THE EXEMPTION THE ALLOWANCE MUST BE GRANTED TO MEET EXPENSES INCURRED OR TO BE INCURRED WHOLLY AND NECESSARILY IN THE PERFORMANCE OF DUTIE S OF AN OFFICE OR EMPLOYMENT OF PROFIT. THE PURPOSE FOR WHICH THE AL LOWANCE IS GRANTED IS ALONE NOT DETERMINATIVE OF CLAIM OF EXEMPTION. THE INTENTION OF THE FRAMERS OF THE ACT WAS TO GRANT EXEMPTION IN RESPECT OF AMO UNTS RECEIVED BY THE ASSESSEES NOT FOR HIS OWN BENEFIT BUT FOR THE SPECI FIED PURPOSE OF MEETING THE EXPENSES WHOLLY AND NECESSARILY TO INCUR OR TO BE I NCURRED FOR THE PERFORMANCE OF THE DUTIES. THEREFORE THE ALLOWANC ES GRANTED TO MEET THE EXPENSES WHOLLY AND NECESSARILY INCURRED OR TO BE I NCURRED FOR THE PERFORMANCE OF THE DUTIES OF THE OFFICE OR EMPLOYME NT OF THE GRANTEE ALONE QUALIFIES FOR EXEMPTION UNDER THE ACT AND ANY SURPL US REMAINING IN THE HANDS OF THE GRANTEE AFTER MEETING THE EXPENSES DOES NOT BEAR THE CHARACTER OF THE 11 ALLOWANCES FOR THE MEETING EXPENSES BUT FOR PERFORM ING THEIR DUTIES OF THE OFFICE FOR EMPLOYMENT. THIS WOULD BE SO EVEN IF THE EMPLOYER HAS DISABLED HIMSELF FROM DEMANDING REFUND OF THE AMOUNT NOT EXP ENDED FOR MEETING THE EXPENSES INCURRED OR TO BE INCURRED IN THE PERFORMA NCE OF DUTIES OF OFFICE OR EMPLOYMENT OF PROFIT AND THE SURPLUS REMAINING IN T HE HANDS OF THE GRANTEE ACQUIRES FOR THE PURPOSE OF INCOME TAX ACT THE CHAR ACTER OF THE ADDITIONAL REMUNERATION. MEANING THEREBY THE ONUS IS UPON TH E ASSESSEE TO PLACE RELEVANT EVIDENCE IN ORDER TO PROVE THAT THE ALLOWA NCES GIVEN TO HIM ARE SPENT FOR THE PURPOSE TO WHICH IT WAS GRANTED. 18. TURNING TO THE FACTS OF THE CASE WE FIND THAT THE ASSESSEE WAS GRANTED THE CONSTITUENCY ALLOWANCE CONVEYANCE ALLOWANCE T ELEPHONE ALLOWANCE CLERICAL ALLOWANCE MEDICAL ALLOWANCE AND CONTINGEN CY ALLOWANCE BESIDES SALARY. DURING THE RELEVANT ASSESSMENT YEAR AS PER SECTION 10(17) THE MLAS ARE ENTITLED FOR EXEMPTION OF THE DAILY ALLOWANCES AND ALL OTHER ALLOWANCES NOT EXCEEDING RS.2000/- P.M. THOUGH W.E.F 1.4.2007 MLAS ARE ALSO ENTITLED FOR EXEMPTION OF ANY CONSTITUENCY ALLOWANCE RECEIV ED BY THEM BY VIRTUE OF AN AMENDMENT IN SECTION 10(17) BUT IT WAS WITH THE PROSPECTIVE EFFECT AND IN THE IMPUGNED ASSESSMENT YEARS THE ASSESSEE CANNOT T AKE THE BENEFIT OF IT AND ALL OTHER ALLOWANCES ARE LIMITED TO RS.2000/- P .M. ONLY. THOUGH IN SECTION 10(17) THE LEGISLATURE HAS RESTRICTED THE E XEMPTION OF ALL OTHER ALLOWANCES UPTO RS.2000/- P.M. YET THROUGH VARIOUS JUDICIAL PRONOUNCEMENTS IT HAS BEEN HELD THAT THE MLAS ARE ENTITLED TO TAKE THE BENEFIT OF SECTION 10(14) ALSO. WE THEREFORE OF THE VIEW THAT ACCORDI NG TO THE RULE 2BB READ WITH SECTION 10(14) OF THE ACT ONLY THE CONVEYANCE ALLOWANCE OR THE CLERICAL ALLOWANCE ARE REQUIRED TO BE EXEMPTED SUBJECT TO P ROOF THAT IT WAS INCURRED IN PERFORMANCE OF DUTIES OF AN OFFICE. SO FAR AS T HE TELEPHONE ALLOWANCE AND CONSTITUENCY ALLOWANCE ARE CONCERNED WE DO NOT FIN D ANY SPECIFIC CLAUSE IN RULE 2BB(1) OF THE I.T. RULES. THUS THESE ALLOWANC ES CANNOT BE ALLOWED U/S 10(14) OF THE I.T. ACT. WITH REGARD TO THE MEDICAL ALLOWANCES THE COMPLETE FACTS ARE NOT AVAILABLE ON RECORD WHETHER IT WAS A REIMBURSEMENT OR IT WAS AN ALLOWANCE LIKE OTHER ALLOWANCES GRANTED TO THE MLA. IF IT IS A REIMBURSEMENT OF THE MEDICAL EXPENDITURE IT CAN BE ALLOWED IN TH E LIGHT OF THE JUDGEMENT OF THE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. SHI VCHARAN MATHUR (SUPRA). 12 OTHERWISE NO DEDUCTION CAN BE ALLOWED AS IT DOES NO T FIND PLACE IN RULE 2BB(1) OF THE IT RULES. 19. WE DO NOT AGREE WITH THE PROPOSITION OF THE LD. COUNSEL FOR THE ASSESSEE THAT ALL TYPE OF ALLOWANCES GRANTED TO THE ASSESSEE ARE ELIGIBLE FOR EXEMPTION U/S 10(14) OF ACT. IF THAT BE THE CASE THERE WAS NO NEED OF PROVIDING A SEPARATE SUB SECTION 17 IN SECTION 10 F OR ALLOWING CERTAIN OTHER ALLOWANCES; LIKE DAILY ALLOWANCE TO MLAS FOR ITS EX EMPTION FROM THE TOTAL INCOME OF THE ASSESSEE. MEANING THEREBY BOTH THE PROVISIONS RELATING TO THE EXEMPTION OF THE ALLOWANCES I.E. 10(14) & 10(17) AR E TO BE READ TOGETHER AND IN CASE OF MLAS & MPS THEY ARE ENTITLED FOR THE EXE MPTION OF ALLOWANCES UNDER BOTH THE CLAUSES SIMULTANEOUSLY. IN THE CASE OF SECTION 10(17) THE MLAS & MPS ARE GRANTED A LUMPSUM EXEMPTION OF PARTI CULAR ALLOWANCE WITHOUT PRODUCING ANY EVIDENCE WITH REGARD TO ITS E XPENDITURE WHEREAS U/S 10(14) THE ALLOWANCES ARE ONLY ALLOWED TO BE EXEMP TED SUBJECT TO PROOF THAT IT WAS INCURRED TO MEET A PARTICULAR PURPOSE. 20. WE HAVE ALSO GONE THROUGH THE HISTORY OF PROVIS IONS OF SECTION 10(17) OF THE ACT AND WE FIND THAT AT THE TIME OF ENACTMEN T OF THE INCOME TAX ACT 1961 ONLY DAILY ALLOWANCES RECEIVED BY THE MPS OR THE MLAS OR ANY MEMBER OF THE COMMITTEE THERE OF ARE EXEMPTED FROM THE TOT AL INCOME. THE SCOPE OF THE EXEMPTION WAS WIDENED TIME TO TIME AND BY TAXAT ION LAWS AMENDMENT AND MISCELLANEOUS PROVISIONS ACT 1986 W.E.F. 1 ST APRIL 1986 THE AMENDMENT WAS MADE AND BESIDES THE DAILY ALLOWANCES ALL OTHE R ALLOWANCES UPTO RS.1250/- P.M. IN AGGREGATE IN THE CASE OF MP AND R S.600/- P.M. IN THE CASE OF MLA WERE EXEMPTED FROM TAX. FURTHER AMENDMENT W AS MADE IN THIS CLAUSE BY THE FINANCE ACT 1997 AND THE AMOUNT OF R S.600/- P.M. IN CASE OF MLAS WAS INCREASED TO RS.2000/- P.M. THEREAFTER F URTHER AMENDMENT WAS ALSO MADE BY THE FINANCE ACT 2006 AND LIKE THE MPS THE CONSTITUENCY ALLOWANCE RECEIVED BY THE MLAS WAS ALSO MADE EXEMPT IVE FROM THE TOTAL INCOME OF THE ASSESSEES. AMENDMENT BY FINANCE ACT 2006 WAS BROUGHT IN ORDER TO BRING THE UNIFORMITY OF CONSTITUENCY ALLOW ANCES ALLOWED BY DIFFERENT STATES THROUGH THEIR INDEPENDENT NOTIFICATIONS WITH RESPECT TO OTHER 13 ALLOWANCES BY AMENDING CLAUSE 3 OF SECTION 10(17) A ND THE LEGISLATURE HAS ALLOWED THE EXEMPTION OF THE ENTIRE CONSTITUENCY AL LOWANCE GRANTED TO MLAS. 21. FROM A CAREFUL STUDY OF THE AMENDMENTS BROUGHT TIME TO TIME IN SECTION 10(17) OF THE ACT WE ARE OF THE VIEW THAT LEGISLATURE HAS BEEN QUITE CONSCIOUS ABOUT THE ALLOWANCES GRANTED TO THE MLAS OR THE MPS AND TIME TO TIME THEY ARE BRINGING ENACTMENTS TO GRANT EXEMPTIO N OF PARTICULAR TYPE OF ALLOWANCES FROM THE TOTAL INCOME OF THE MLAS OR MPS . HAD IT BEEN A CASE THAT FOR ALL ALLOWANCES SECTION 10(14) CAN BE INVOK ED SUBJECT TO PROOF OF THE EXPENDITURE TO BE INCURRED IN RESPECT OF THAT PURPO SE TO WHICH THE ALLOWANCES ARE GIVEN THERE WOULD BE NO NEED TO MAKE A NECESSA RY AMENDMENT TIME TO TIME IN SECTION 10(17). WE THEREFORE OF THE VIEW THAT WHILE DEALING WITH THE ISSUE OF SPECIAL ALLOWANCES GRANTED TO THE MLAS OR MPS ONE HAS TO KEEP IN MIND BOTH THE PROVISIONS OF SECTION 10(17) AND 10(1 4) OF THE ACT AND ONLY THOSE ALLOWANCES ARE TO BE EXEMPTED FROM THE TOTAL INCOME OF THE ASSESSEES WHICH ARE SPECIFIED IN THESE SECTIONS OR RULE 2BB O F THE I.T. RULES. UNDER SECTION 10(17) THE LEGISLATURE HAS PRESCRIBED A PA RTICULAR LIMIT UPTO WHICH THE ALLOWANCES ARE TO BE EXEMPTED FROM THE TOTAL INCOME OF THE ASSESSEES BUT SECTION 10(14) IS TO BE READ WITH RULE 2BB OF THE I .T. RULES AND ONLY THOSE ALLOWANCES ARE TO BE ALLOWED TO BE EXEMPTED FROM TH E TOTAL INCOME OF THE ASSESSEES WHICH ARE SPECIFICALLY MENTIONED IN RULE 2BB SUBJECT TO PROOF OF ITS BEING SPENT FOR THE PURPOSE TO WHICH IT IS RECEIVED OR GRANTED. WE THEREFORE SET ASIDE THE ORDER OF THE CIT(A) AND RESTORE THE M ATTER TO THE FILE OF A.O. WITH A DIRECTION TO RE-EXAMINE THE ISSUE AND GRANT AN EXEMPTION OF THE CONVEYANCE ALLOWANCE AND THE CLERICAL ALLOWANCE AFT ER MAKING NECESSARY VERIFICATION OF THE EXPENDITURE INCURRED FOR THE SA ID PURPOSE. REST OF THE ALLOWANCES I.E. TELEPHONE ALLOWANCE CONSTITUENCY A LLOWANCE AND CONTINGENCY ALLOWANCE DO NOT FALL EITHER IN THE PURVIEW OF SECT ION 10(14) OR 10(17) AND THEY CANNOT BE ALLOWED TO BE EXEMPTED FROM THE TOTA L INCOME OF THE ASSESSEES. SO FAR AS MEDICAL ALLOWANCES ARE CONCER NED THE A.O. SHOULD VERIFY THE NATURE OF THESE ALLOWANCES. IF IT IS A REIMBURSEMENT OF THE MEDICAL EXPENSES INCURRED BY THE MLA IT MAY BE ALLOWED IN THE LIGHT OF THE JUDGEMENT OF THE RAJASTHAN HIGH COURT IN THE CASE O F CIT VS. SHIVCHARAN MATHUR. OTHERWISE NO EXEMPTION CAN BE ALLOWED AS IT DOES NOT FALL EITHER IN 14 THE PURVIEW OF SECTION 10(14) AND 10(17) OF THE I.T . ACT. ACCORDINGLY THESE APPEALS ARE DISPOSED OFF. 22. IN THE RESULT APPEALS OF THE ASSESSEES ARE PAR TLY ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN T HE OPEN COURT ON 9.2.2010 SD/- SD/- (BR BASKARAN) (SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER VG/SPS VISAKHAPATNAM DATED 9 TH FEBRUARY 2010 COPY TO 1 SHRI M. VENKATA SUBBAIAH EX-MLA PESARLANKA VILL AGE BHATTIPROLE MANDAL GUNTUR DIST. 2 ITO WARD-2(3) VIJAYAWADA 3 SHRI P.V.V.P. KRISHNA RAO AMBICA STREET POWERPE T ELURU W.G. DIST 4 THE ACIT CIRCLE-I ELURU 5 THE CIT VIJAYAWADA 6 THE CIT(A) VIJAYAWADA 7 THE CIT RAJAHMUNDRY 8 THE CIT(A) RAJAHMUNDRY 9 THE DR ITAT VISAKHAPATNAM. 10 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM 15 FIT FOR PUBLICATION (BR BASKARAN) (SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER