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The assessee has received fixed conveyance allowance and conveyance expenses and the same has been claimed deduction under section 10(14) of the Act. The Assessing Officer is of the opinion that the assessee is failed to prove the conditions laid down in section 10(14), therefore, the claim of the assessee is disallowed. where amounts are paid to the employees by an employer to meet expenses wholly, necessarily and exclusively for the performance of the duties, such amounts can be exempted to the extent it is shown that it has been incurred for the purpose for which it was grantedIn the case of employees of the State or Corporations, whether statutory or otherwise, where the employer after having surveyed the actual expenditure necessary for performance of the duty, grants actual allowance generally to all the employees, it is to be presumed that the entire expenditure has been incurred for the purpose for which it has been granted, for if it not incurred for which is has been given, it would entail disciplinary action against the employee. Unless such a case has been initiated against an employee by an employer, the said presumption that the employee has incurred the expenditure for which it is granted, will apply and it will not be necessary for the employees to submit accounts every month to the employer and along with return to the assessing authority. If, in such matters, filing of the accounts and vouchers/receipts are insisted upon to claim exemption under section 10(14) of the Act by the Income-tax authorities, it will lead to voidable waste of time and expenditure and would serve no useful purpose but on the contrary it would be counter-productive. The coordinate bench of the tribunal in the case of B. Chinnaiah & Others (supra) has considered the ratio laid down by the Hon'ble Jurisdictional High Court and allowed the deduction claimed by the assessee. In this view of the matter, we hold that the additional conveyance allowance is exempt under section 10(14) of the Act.”

Shanti Prime Publication Pvt. Ltd.

Section 10(14) of Income Tax Act, 1961—In the instant case, AO issued notice u/s 148 on the ground that there is an escapement of income in respect of deduction claimed by the assessee. AO has observed that assessee has claimed, fixed conveyance allowance of 45,000/- and conveyance expenses of 37,511/-, as exempt under section 10(14) of the Act. The Assessing Officer has held that the assessee is not able to establish that he has fulfilled all the conditions laid down in section 10(14), disallowed the exemption claimed by the assessee.

CIT also confirmed the order of AO.

Held that—By considering the facts and circumstances of the case and also keeping in view of the ratio laid down by the decision of the Hon'ble Jurisdictional High Court (supra), we are of the opinion that the exemption claimed by the assessee has to be allowed. Insofar as case-law relied on by the Assessing Officer in the case of B. Chinnaiah & Others (supra) is concerned, it relates to incentive bonus and is not applicable to the facts of the present case. Accordingly, the order passed by the ld. CIT(A) is set aside and the appeal filed by the assessee is allowed.[THOTA SRINIVASA BABU AND AVADHANULA SRINIVASA RAO VERSUS ITO, WARD-1, PALKOL] [2018] [7] [ITCD Online] [17] [ITAT VISAKHAPATNAM]