THE HON'BLE SMT JUSTICE T.MEENA KUMARI & THE HON'BLE SRI JUSTICE NOOTY RAMAMOHANA RAO REFERRED CASE NO :240 of 1996 ORDER: (Per Hon’ble Smt. Justice T. Meena Kumari) In this case, under Section 256(1) of the Income Tax Act, 1961, the following questions are referred to this Court for opinion: 1. “Whether, on the facts and in the circumstances of the case, the Tribunal is correct in holding that the allowability or non-allowability of the assessee’s claim of deduction of 40% of incentive bonus towards expenses for earning the incentive bonus is a debatable issue and therefore, the deduction claimed cannot be disallowed by way of prima facie adjustment at the intimation stage itself under Section 143(1)(a)? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that the assessee’s claim of exemption under Section 10(14) of the I.T. Act of the additional conveyance allowance is a debatable issue and as such, it cannot be the subject matter of prima facie adjustment in an intimation passed under Section 143(1)(a)?” When the matter was taken up, it is submitted by both the Counsel that the above referred question No.1 is covered by a judgment of this Court reported in “ Commissioner of Income Tax Vs. B. Chinnaiah and others[1], and insofar as question No.2 is concerned, the same is covered by an unreported judgment of this Court in R.C.No.117 of 1992, dated 10.10.1996. Following the above judgments, the first question is answered in favour of the revenue and the second question is answered in favour of the assessee. Accordingly, the reference is answered. __________________________ Justice T. Meena Kumari _____________________________ Justice Nooty Ramamohana Rao Date: 23rd March, 2010 nn. THE HON'BLE SMT JUSTICE T.MEENA KUMARI & THE HON'BLE SRI JUSTICE NOOTY RAMAMOHANA RAO REFERRED CASE NO :240 of 1996 (Order delivered by the Hon’ble Smt. Justice T. Meena Kumari) 23/03/2010 [1] 1995 Income Tax Reports Vol.214 Page No.368