The Ahmedabad Bench of Income Tax Act Appellate Tribunal (ITAT) held that children education, helper & uniform attire reimbursement, the same are coming under the purview of Section 10(14) of the Income Tax Act,1961 thus allowed tax free allowance on these perquisites.
The assessee Amit Dhirajlal Doshi filed return of income declaring total income of Rs.77,78,190/-. The return was duly processed under Section 143(1) of the Income Tax Act, 1961 and statutory notices were issued to the assessee and served.
The Assessing Officer (AO) observed that the assessee has credited an amount of Rs.58,63,992/- being salary income, however, in the statement of income the assessee has shown salary income of Rs.52,52,592/- only. The AO added Rs.6,11,400/- as short declaration of salary income. The AO also disallowed interest under Section 57 of the Income Tax Act amounting to Rs.31,99,303/- which was utilised for the purpose of immovable property. The AO also made addition of Rs.44,573/- in respect of interest on LIC loans.
Being aggrieved by the Assessment Order, the assessee filed appeal before the Commissioner of Income Tax (Appeals) [CIT(A)]. The CIT(A) partly allowed the appeal of the assessee.
Further aggrieved the assessee filed an appeal before the Tribunal.
The Authorised Representative of the assessee (AR) submitted that addition of Rs.6,11,400/- the assessee received gross salary of Rs.58,63,992/- which included car reimbursement, children education, driver salary reimbursement, helper, telephone reimbursement and uniform Attire reimbursement. The AR submitted that the Assessing Officer has not considered tax free allowance and included the said allowance in taxable salary.
The Departmental Representative (DR) submitted that the CIT(A) as well as the AO has given all the detailed finding in respect of gross salary and the reimbursement is taxable income and the same was rightly disallowed by the CIT(A).
The Bench comprising of Smt. Annapurna Gupta, Accountant Member and Ms. Suchitra Kamble, Judicial Member observed that it is pertinent to note that the incentive such as car reimbursement, driver salary reimbursement and telephone reimbursement comes under the purview of taxable income and thus the AO has rightly disallowed the same as they are perquisites. But, as regards to children education, helper & uniform attire reimbursement, the same are coming under the purview of Section 10(14) of the Income Tax Act and hence are allowable.
Hence, partly allowed the assessee’s appeal on this ground.
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