29 Jan 2009, 1254 hrs IST, Sanjay K Singh, ET Bureau

Now, you don't need proof to claim LTA, conveyance

NEW DELHI: Employers, while assessing the conveyance and leave & travel allowance
(LTA) claims of their staff, are under no statutory obligation to collect supporting
evidence and furnish them to tax authorities, the Supreme Court said on Wednesday.


A bench comprising Justice SH Kapadia and Justice Aftab Alam said that assessee
employers are under no statutory obligation to collect bills and details to prove that the
employees had utilised the amounts obtained against these claims on travel and related
expenses.

According to prevailing rules, if claims on LTA and conveyance are not supported by
journey bills, they would be taxed. For instance, on an LTA allowance of Rs 1 lakh, if
documentary proof such as air tickets, taxi vouchers and other public transport bills are
submitted only for Rs 50,000, then tax is applicable on the rest of the amount.


Regardless of the amount an executive is entitled to as LTA, tax laws allow air tickets only
in the domestic sector for the claim.


The apex court order came in a plea by companies including Larsen & Toubro and ITI. In
its defence, the revenue department had argued that assessee companies were under
statutory obligation under Income Tax Act, 1961, and relevant rules, to collect
documentary proof to show that their employee(s) had actually utilised the amount paid
towards the leave travel concession and conveyance allowance.

PROOF OF TRAVEL NOT REQUIRED FOR CLAIMING LTA: SC

Employers, while assessing the conveyance and leave & travel allowance
(LTA) claims of their staff, are under no statutory obligation to collect
supporting evidence and furnish them to tax authorities, the Supreme
Court said on Wednesday. A bench comprising Justice SH Kapadia and
Justice Aftab Alam said that assessee employers are under no statutory
obligation to collect bills and details to prove that the employees had
utilised the amounts obtained against these claims on travel and related
expenses. According to prevailing rules, if claims on LTA and
conveyance are not supported by journey bills, they would be taxed. For
instance, on an LTA allowance of Rs 1 lakh, if documentary proof such
as air tickets, taxi vouchers and other public transport bills are
submitted only for Rs 50,000, then tax is applicable on the rest of the
amount. Regardless of the amount an executive is entitled to as LTA,
tax laws allow air tickets only in the domestic sector for the claim. The
apex court order came in a plea by companies including Larsen
&Toubro and ITI. In its defence, the revenue department had argued
that assessee companies were under statutory obligation under Income
Tax Act, 1961, and relevant rules, to collect documentary proof to show
that their employee(s) had actually utilised the amount paid towards the
leave travel concession and conveyance allowance. Rejecting the plea,
the court in its order said: The beneficiary of exemption under Section
10(5) (of the Income Tax Act) is an individual employee. There is no
circular of Central Board of Direct Taxes (CBDT) requiring the
employer under Section 192 to collect and examine the supporting
evidence to the declaration to be submitted by an employee(s).
www.economictimes.indiatimes.com

ITEM NO.103 COURT NO.5 SECTION IIIA


SUPREME COURT OF INDIA
RECORD OF PROCEEDINGS

CIVIL APPEAL NO(s). 993 OF 2005

COMMISSIONER OF INCOME TAX & ANR. Appellant (s)

VERSUS

M/S. LARSEN & TOUBRO LTD. Respondent(s)
(With office report )

WITH

Civil Appeal NO. 992 of 2005 - With office report

Date: 21/01/2009 This Appeal was called on for hearing today.

CORAM :
HON'BLE MR. JUSTICE S.H. KAPADIA
HON'BLE MR. JUSTICE AFTAB ALAM

For Appellant(s) Mr. K. Radhakrishnan, Sr.Adv.
Mr. Arijit Prasad, Adv.
Mr. Aman Ahluwalia, Adv.
Mr. Rahul Kaushik, Adv.
Mr. B.V. Balaram Das, Adv.

For Respondent(s) Mr. P.J. Pardiwalla, Sr. Adv.
Mr. Rustom B. Hathikhanawala, Adv.
Mr. K.T. Anantharaman, Adv.
Mr. Vasudevan Raghavan, Adv.


UPON hearing counsel the Court made the following
ORDER

The appeals are dismissed with no order as to costs.

(S. Thapar) (Madhu Saxena)
PS to Registrar Court Master
The signed order is placed on the file.
IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.993 OF 2005


COMMISSIONER OF INCOME TAX & ANR. ...APPELLANT (S)

VERSUS

M/S LARSEN & TOUBRO LTD. ...RESPONDENT(S)

WITH

CIVIL APPEAL NO. 992 OF 2005


ORDER

A short question which arises for determination in these Civil Appeal(s) is -
whether the assessee(s) was under statutory obligation under Income Tax Act, 1961,
and/or the Rules to collect evidence to show that its employee(s) had actually utilized
the amount(s) paid towards Leave Travel Concession(s)/Conveyance Allowance?

It may be noted that the beneficiary of exemption under Section 10(5) is an
individual employee. There is no circular of Central Board of Direct Taxes (CBDT)
requiring the employer under Section 192 to collect and examine the supporting
evidence to the Declaration to be submitted by an employee(s).

For the above reasons there is no merit in the Civil Appeals and the same are
dismissed with no order as to costs.

....................J.
[ S.H. KAPADIA ]
New Delhi,
January 21, 2009
J
[ AFTAB ALAM ]
ITEM NO.101 COURT NO.5 SECTION IIIA

SUPREME COURT OF INDIA
RECORD OF PROCEEDINGS

CIVIL APPEAL NO(s). 1001 OF 2005

COMMNR. OF INCOME TAX & ANR. Appellant (s)

VERSUS

I.T.I. LTD. Respondent(s)
(With office report)

WITH
Civil Appeal NO. 1002-1009 of 2005 - With office report

Date: 21/01/2009 This Appeal was called on for hearing today.

CORAM :
HON'BLE MR. JUSTICE S.H. KAPADIA
HON'BLE MR. JUSTICE AFTAB ALAM

For Appellant(s) Mr. K. Radhakrishnan, Sr.Adv.
Mr. Arijit Prasad, Adv.
Mr. Rahul Kaushik, Adv.
Mr. B.V. Balaram Das,Adv.

For Respondent(s) Mr. T.L. Vishwanatha Iyer, Sr.Adv.
Mr. Rajiv Tyagi,Adv.
Mr. Chanchal Biswal, Adv.
Mr. Vikas Mishra, Adv.
Mr. P.J. Pardiwalla, S.Adv.
Mr. Rustom B.Hathikhanawala, Adv.

UPON hearing counsel the Court made the following
ORDER

The appeals are dismissed with no order as to costs.

(S. Thapar) (Madhu Saxena)
PS to Registrar Court Master
The signed order is placed on the file.
IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.1001 OF 2005

COMMNR. OF INCOME TAX & ANR. ...APPELLANT(S)

VERSUS
I.T.I. LIMITED ...RESPONDENT(S)

WITH

CIVIL APPEAL NOS. 1002 TO 1009 OF 2005

ORDER

A short question which arises for determination in these Civil Appeal(s) is -
whether the assessee(s) was under statutory obligation under Income Tax Act, 1961,
and/or the Rules to collect evidence to show that its employee(s) had actually utilized
the amount(s) paid towards Leave Travel Concession(s)/Conveyance Allowance?

It may be noted that the beneficiary of exemption under Section 10(5) is an
individual employee. There is no circular of Central Board of Direct Taxes (CBDT)
requiring the employer under Section 192 to collect and examine the supporting
evidence to the Declaration to be submitted by an employee(s).

For the above reasons there is no merit in the Civil Appeals and the same are
dismissed with no order as to costs.

....................J.
[ S.H. KAPADIA ]
New Delhi,
January 21, 2009
J
[ AFTAB ALAM ]
ITEM NO.102 COURT NO.5 SECTION IIIA

SUPREME COURT OF INDIA
RECORD OF PROCEEDINGS

CIVIL APPEAL NO(s). 989 OF 2005

COMMISSIONER OF INCOME TAX,BANGALORE & ANR. Appellant (s)

VERSUS

M/S. I.T.I. LTD. Respondent(s)

Date: 21/01/2009 This Appeal was called on for hearing today.

CORAM :
HON'BLE MR. JUSTICE S.H. KAPADIA
HON'BLE MR. JUSTICE AFTAB ALAM

For Appellant(s) Mr. K. Rdhakrishnan, Sr.Adv.
Mr. Arijit Prasad, Adv.
Mr. Rahul Kaushik, Adv.
Mr. Tapeshwar Singh, Adv.
Mr. B.V. Balaram Das,Adv.

For Respondent(s) Mr. T.L. Vishwanatha Iyer, Sr.Adv.
Mr. Rajiv Tyagi,Adv.
Mr. Chanchal Biswal, Adv.
Mr. Vikas Mishra, Adv.

UPON hearing counsel the Court made the following

ORDER

The appeal is dismissed with no order as to costs.


(S. Thapar) (Madhu Saxena)
PS to Registrar Court Master


The signed order is placed on the file.
IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 989 OF 2005


COMMISSIONER OF INCOME TAX, BANGALORE & ANR. ...APPELLANT (S)

VERSUS
M/S I.T.I. LIMITED ...RESPONDENT(S)


ORDER

A short question which arises for determination in these Civil Appeal(s) is -
whether the assessee(s) was under statutory obligation under Income Tax Act, 1961,
and/or the Rules to collect evidence to show that its employee(s) had actually utilized
the amount(s) paid towards Leave Travel Concession(s)/Conveyance Allowance?

It may be noted that the beneficiary of exemption under Section 10(5) is an
individual employee. There is no circular of Central Board of Direct Taxes (CBDT)
requiring the employer under Section 192 to collect and examine the supporting evidence
to the Declaration to be submitted by an employee(s).

For the above reasons there is no merit in the Civil Appeals and the same are
dismissed with no order as to costs.

....................J.
[ S.H. KAPADIA ]
New Delhi,
January 21, 2009
J
[ AFTAB ALAM ]