The Income Tax Appellate Tribunal (ITAT) Hyderabad on Wednesday ordered that the allowances received by a Member of Legislative Assembly is to be exempted from Income Tax.
The Tribunal was hearing an appeal filed by Andhra Pradesh MLA Shri. M Ranga Reddy.
He filed his return of income for the AY. 2005-06 on 31-03- 2006 declaring total income of Rs. 2,54,433/- and agricultural income of Rs. 1,00,000/-. But, the Assessing Officer (AO) completed the assessment u/s. 143(3) r.w.s. 147 of the Income Tax Act by treating the income from allowances received as MLA at Rs. 4,26,000/- and determined the total income at Rs. 6,80,430/-. He was of the view that in the absence of employee and employer relationship, the assessee is not eligible for the claim.
Shri B. Ramakotaiah, accountant member, while disposing off the appeal in favour of the assesse, noticed the past decisions wherein it was held that it is no need to ask for expenses actually incurred for granting exemptions under section 4(3)(vi) of the 1922 Act.
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