IN THE HIGH COURT OF JUDICATURE ANDHRA PRADESH AT HYDERABAD MONDAY THE TWENTYSECOND DAY OF FEBRUARY TWO THOUSAND AND TEN PRESENT THE HONOURABLE SRI JUSICE B. PRAKASH RAO AND THE HONOURABLE SRI JUSTICE REDDY KANTHA RAO REFERRED CASE No. 6 7 OF 1996 {under section 256 (1) of the Indian Income Tax Act, 1961 in RA.No.101/Hyd/93, dated 17-7-1995 Andhra Pradesh of ITAT Hyderabad Bench ‘B’} Between: The Commissioner of Income-tax Viskahapatnam …. Petitioner V/s. YRV Venkateswara Rao, Pithapuram.. …. Respondent Counsel for the Applicant : Sri S.R. Ashok Senior Counsel Counsel for the Respondent: None appeared THE HONOURABLE SRI JUSTICE B. PRAKASH RAO AND THE HONOURABLE SRI JUSTICE REDDY KANTHA RAO REFERRED CASE No. 6 7 of 1996 J U D G M E N T : (Per the Hon'ble Sri Justice B.Prakash Rao) RC.No. 67 of 1996 is referred to this Court by the Income- Tax Appellate Tribunal, A.P., Hyderabad under section 256 (1) of the Indian Income Tax Act, 1961 in RA.No. 101/Hyd/93 17-7-1995 Andhra Pradesh of ITAT Hyderabad Bench ‘B’ on its file for decision on the following question of law viz., “Whether on the facts and in the circumstances of the case, the ITAT was justified in holding that 40% of incentive bonus should be allowed as an expenditure in addition to the standard deduction under section 16 (1), more so, when the expenditure involved, if any, in travelling is covered by the conveyance allowance and additional conveyance allowance provided by the employer and exempted under section 10 (14) of the Income Tax Act, 1961 ?” 2. Heard the learned standing counsel for Income-tax, Sri S.R. Ashok for the petitioner. Though served none appeared for the respondent herein. 3. The question which has been referred to in regard to the entitlement of the deduction of 40% incentive bonus earned from the Life Insurance Corporation of India, which is now represented across the bar that the same is no longer res integra in view of the decision of this Court in COMMISSIONER OF INCOME-TAX V/s. B. CHINNAIAH AND ORS[1]., 214 ITR-368, wherein the Division Bench of this Court held that under section 10 (14) of the Indian Income Tax Act, 1961 such deduction is not permissible and there must be a notification by the Central Government specifying the extent to which the expenses are allowable. Following the said decision, the question referred to is answered in favour of the respondent. 4. Accordingly, RC.No. 67 of 1996 is disposed of. No costs. __________________________ JUSTICE B. PRAKASH RAO ______________________________________ JUSTICE REDDY KANTHA RAO 22-02-2010. I s L THE HONOURABLE SRI JUSTICE B. PRAKASH RAO AND THE HONOURABLE SRI JUSTICE REDDY KANTHA RAO REFERRED CASE No. 6 7 OF 1996 Judgment of the Division Bench delivered by the Hon'ble Sri Justice B.Prakash Rao) Circulation Entry No. 129 Date: 22-02-2010 COMPUTER No. 43 Court Master: I s L [1] ) ITR-1995, Volume-214 Page No. 468