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December 2009

Exemption — S. 10(5) — Leave travel concession/Conveyance allowance — For the purpose of S. 192, employer need not collect and examine the supporting evidence to the deduction submitted by the employees.

By Kishor Karia, Chartered Accountant
Atul Jasani, Advocate
Reading Time 1 mins

New Page 1

  1. Exemption — S. 10(5) — Leave
    travel concession/Conveyance allowance — For the purpose of S. 192, employer
    need not collect and examine the supporting evidence to the deduction
    submitted by the employees.

[CIT v. Larsen and Toubro
Ltd., (2009) 313 ITR 1 (SC)]

A short question which arose
for determination in the civil appeal(s) before the Supreme Court was, whether
the assessee(s) was/were under statutory obligation under the Income-tax Act,
1961, and/or the Rule to collect evidence to show that its employee(s) had
actually utilised the amount(s) paid towards leave travel concession(s)/conveyance
allowance.

The Supreme Court held that
the beneficiary of exemption u/s.10(5) was an individual employee and there is
no circular of the Central Board of Direct Taxes (CBDT) requiring the employer
u/s.192 to collect and examine the supporting evidence to the declaration to
be submitted by an employee(s).

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