This appeal by assessee is against order of AAC in his appeal No. 58-SAL/83-84 dt. 6th Feb., 1984 holding that incentive bonus received by assessee from LIC, formed part of his salary and thereby declining to allow any deduction in respect of expenses claimed. facts in this regard are as follows. assessee is Development Officer of LIC. Beside salary and other allowances, assessee had received from LIC during previous year ended 31st March, 1982, Rs. 18,936 conveyance allowance Rs. 1,742+additional conveyance allowance Rs. 17,194 and also "incentive bonus to class II" of Rs. 43,150 making up gross income of Rs. 83,032. assessee claimed exemption in respect of conveyance allowance of Rs. 18,986 under s. 10(14). It may be mentioned at this stage, that in certificates issued by LIC, Nagpur dt. 24th May, 1982, it has been certified, that sum of Rs. 18,936 was specifically paid to said employee as conveyance allowance to meet expenses wholly, necessarily and exclusively incurred in performance of duties of his office and, therefore, same is exempt from tax under s. 10(14). In statement of income filed alongwith return of income, assessee had, besides claiming exemption in respect of conveyance allowance under s. 10(14) referred to above, also claimed deduction in respect of expenses amounting to Rs. 19,648 incurred on sales promotion, maintenance of office etc., and depreciation amounting to Rs. 16,711 on motor car and furniture making up total sum of Rs. 36,359 from incentive bonus of Rs. 43,150 and showed net income of Rs. 6,791 as income from profession. It may be mentioned, that assessee had treated incentive bonus received by him as income above expenditure as deduction from gross amount. ITO did not agree with assessee regarding deduction claimed from incentive bonus. He held, that incentive bonus was nothing but part of salary for services rendered to LIC as payment was made on basis of percentage as per cl. (5) of incentive bonus scheme and, therefore, there was no question of allowing any deduction for expenses from salary. He referred to Gestetner Duplicators (P) Ltd. vs. CIT (1979) 8 CTR (SC) 371: (1979) 117 ITR 1 (SC) and held, that conceptively there was no difference between salary and incentive bonus and, therefore, latter formed part of salary. On appeal, AAC agreed with ITO holding, that very source of incentive bonus was employment of assessee as Development Officer and, therefore, same formed part of assessee s salary. Aggrieved with same, assessee is in appeal before us. submissions made in this behalf by Shri Dewani, ld. Representative for assessee, may be summarised as under. payment of incentive bonus to assessee did not arise out of contract of employment between assessee and LIC. He took us through contract of employment dt. 27th Dec., 1966. incentive bonus paid to assessee was as result of separate scheme of incentive bonus to Development Officers of LIC, 1978. This scheme came into force and applicable to appraisal years ending on or after 30th April, 1978 and initially it was in force till 30th Dec., 1980. We were informed, that same was extended o n similar terms and conditions after 31st Dec., 1980. As per cl. (4) of this scheme, Development Officer whose cost ratio did not exceed 20 per cent in n appraisal year alone was eligible for grant of incentive bonus in respect of that appraisal year in accordance with scheme. Clause (5) of scheme indicates formula for determining incentive bonus which varies from 6 per cent to 2 per cent of such excess as indicated in sub-cls. (a), (b) and (c) of this clause. In case of rural agent, extra incentive bonus was allowed at rate of 10 per cent of basis incentive bonus determined as per cl. (5). Certain standard norms of performance have been indicated in cl. (7). It was, therefore, contended by Shri Dewani, that incentive bonus had absolutely no connection with contract of employment and same was determinable with reference to volume of insurance business canvassed by Development Officer. He therefore, submitted that incentive bonus received by Development Officer was essentially income from profession or other sources and, therefore, all expanses legitimately incurred by Development Officer i n obtaining business, were deductible in ascertaining income under this head. He drew our attention to expenditure incurred by assessee in this behalf under various heads like, rent, sales promotion, telephones, repairs, travelling, salary to staff, miscellaneous, etc., amounting in all to Rs. 19,648 and also deprecation amounting to Rs. 16,711 on motor car and furniture. He submitted that Development Officer had necessarily to maintain office and incur various expenses which are not separately reimbursed by LIC, and, therefore, expenses incurred in this behalf necessarily go to reduce incentive bonus received from LIC. He distinguished decision of Supreme Court in (1979) 8 CTR (SC) 371: (1979) 117 ITR 1 (SC) stating, that, that decision had absolutely no application to facts of this case, as it was with reference to totally different set of facts and circumstances. He submitted, that, in that case, question was whether ITO was justified in disallowing from out of contribution to recognised provident fund, proportionate amount pertaining to commission paid to salesman on ground, that, salary within meaning of r. 2(h) of Part of Schedule IV of IT Act, did not include such commission. High Court having upheld action of ITO in this behalf, it was held on further appeal, by Supreme Court that, if under contract of employment recompense for services rendered by employee was determined at fixed percentage of turnover achieved by him, then such remuneration or recompenses would partake of he character of salary, percentage basis being meagre of salary, and therefore, such recompense would fall within expression "salary" as defined in r. 2(h) of Part of IV Schedule to Act. Shri Dewani submitted, that under contract of employment, assessee was getting regular monthly salary and other allowances which had nothing to do with incentive bonus scheme which was subsequently introduced by LIC with view to provide incentive to Development Officers for obtaining more business of Corporation and recompensing them on basis of certain percentage for results achieved. He invited our attention to following decisions to emphasise his argument, that incentive bonus did not form part of salary. ITO vs. Raj Kumar Sethi (1982) 14 TTJ 160 (Chd): (1982) 1 ITD 907 (Chd). In this case, assessee was Development Officer of LIC who in addition to salary, received incentive bonus under scheme formulated by LIC in present case. He claimed deduction amounting to 40 per cent of bonus for expenses incurred in earning commission. ITO disallowed claim holding, as in present case, that incentive bonus formed part of salary and, therefore, no deduction other than standard deduction under s. 16(1) was admissible. AAC allowed deduction of 20 per cent of bonus. On appeal by Department, Tribunal held that incentive bonus was recompense for efforts put in by assessee beyond call of duty and thereby securing business for employer. Tribunal held, that incentive bonus was neither covered by payment of Bonus Act nor otherwise part of salary as per conditions of employment. Tribunal finally held, that Development Officer was only agent of LIC in so far as this sector of activity was concerned and, therefore, incentive bonus was income from profession eligible for deduction of expenses wholly and exclusively laid out or expended for purpose of profession. Since there was no challenge to findings of AAC in this behalf, claim for deduction of 40 per cent was held to be reasonable and fair. Shri Dewani contended, that facts of this case are absolutely identical and on all fours with those of instant case, and, therefore, this decision is binding on Tribunal in light of dictum laid down by Madras High Court in CIT vs. L. G. Ramamurthi & Ors. 1977 CTR (Mad) 416: (1977) 110 ITR 453 (Mad), that, no Tribunal of fact has any right or jurisdiction to come to conclusion entirely contrary to one reached by another Bench of same Tribunal on same facts. In that case, it was further held by High Court, that, if Bench of Tribunal on identical facts is allowed to come to conclusion directly opposed to conclusion reached by another Bench of Tribunal on earlier occasion, that would be destructive of institutional integrity itself. He, therefore, submitted, that in instant case, facts being identical, decision of Tribunal is binding on this Bench. K. Rami Reddy vs. ITO (1984) 8 ITD 633 (Hyd): In this case assessee was Development Officer of Bank who had received large amount of incentive bonus based on extent of business d o n e by him. assessee claimed conveyance allowance and other allowances against same. ITO allowed only part of expenses but, however, assessed conveyance allowance. expenditure allowed in this behalf was less than 40 per cent of incentive bonus received by assessee. CIT, under s. 263, withdrew deduction allowed by ITO. Tribunal held, that, even as per guidelines laid down in Board s Tribunal held, that, even as per guidelines laid down in Board s Circular, expenditure upto 40 per cent could be allowed as deduction. Since expenditure allowed by ITO was less than 40 per cent contemplated in Board s Circular, CIT was not justified in revoking allowance. CIT vs. Kundan Lal Lal Chand (1961) 41 ITR 245 (All): In this case, commission paid to Karta of HUF who was appointed as Government treasurer was held to be chargeable under s. 10 of IT Act, 1922 as there was no employer and employee relationship. Ram Prashad vs. CIT 1972 CTR (SC) 327: (1972) 86 ITR 122 (SC): Reference was made to this decision to high light necessary ingredients to decide whether person is employee or agent. It was submitted, that in present case, Development Officer while acting under incentive bonus scheme was not employee of LIC as latter could not regulate his work in this behalf. It was submitted, that nature of work in this sector was totally different from nature of work as Development Officer under contract of employment. He also drew our attention to earlier decision of this Bench in ITA Nos. 82 & 83 dt. 16th Feb., 1978 wherein identical question came up for consideration and Bench held, that incentive bonus scheme was not part of services contract and, therefore, Development Officer had dual personality, one of salaried employee and other purely on contractual basis. Bench finally upheld finding of AAC for deduction of expenditure from incentive bonus at 40 per cent of bonus. Our attention was also invited to decision of CIT, Poona under s. 2 4 6 wherein, claim for deduction of expenses upto 25 per cent of incentive bonus was allowed by CIT. Another decision of ITAT, Bombay Bench B in ITA No. 4671(Bom)/1982 dt. 17th March, 1983 wherein Bench had upheld claim for deduction of 40 per cent of expenditure out of incentive bonus was also brought to our notice. It was, therefore, submitted finally by Shri Dewani that, incentive bonus w s essentially for extra word done by Development Officer outside contract of employment and, therefore, nature of receipt being different from salary, deduction for expenses incurred in connection with same should be allowed. in this connection, our attention was also invited to Circular of Board F. No. 14/9/65-II (A-I) dt. 22nd Sept., 1965 wherein, it has been directed, t h t ad hoc deduction for expenses at 40 per cent of first year s commission and 15 per cent of renewal commission should be allowed as deduction from commission earned by insurance agents. Where separate figures are not available, same circular directs that such ad hoc deduction should be restricted to 25 per cent of total commission. Other contentions relating to depreciation and interest were stated to be consequential. As regards claim for exemption of conveyance allowance under s. 10(24), Shri Dewani invited our attention to certificate issued by LIC referred to earlier wherein, it has been categorically stated, that allowance was to meet expenses wholly, necessarily and exclusively incurred in performance of duties and, therefore, same was exempt under s. 10(14). He also invited our attention to decision of ITAT, Bombay Bench B in ITA Nos. 2262 to 2264 (Bom)/1978-79 wherein it has been held, that, no part of expenditure in this behalf was of personal nature. ld. Departmental Representative submitted, that, no earlier decision of Bench of Tribunal or that of High Court is binding unless facts are identical. He referred to 65 ITR 225 which laid down, that, subject matter of appeal was limited before Tribunal. According to him, in earlier decisions, contract of employment was not considered by Tribunal. He took us thorough various portions of contract of employment wherein, nature of work of Development Officer is specified. According to him, main work of Development Officer under para 11 of contract of employment is to control agents and secure business. He submitted, that scheme of incentive bonus was nothing but remuneration for business secured as part of or in extension of contract of employment. There was nothing new to be done apart from what has been specified in contract of employment, according to him. He also submitted, that payments to Development Officers were subject to deduction of tax at source under s. 194D. He argued, that, subject to deduction of tax at source under s. 194D. He argued, that, remuneration to Development Officer was partly by means of salary and partly by way of incentive bonus. He also relied on decision of Supreme Court in (1979) 8 CTR (SC) 371: (1979) 117 ITR 1 (SC) referred to by ITO in his order. In fine, he submitted that earlier decision of Tribunal in this behalf had not occasion to consider contract of service and, therefore, those decisions have no binding effect in present case. There was no difference in nature of work done by Development Officer under scheme of incentive bonus and contract of employment. We have carefully considered submissions made by either side. We are unable to agree with ld. Departmental Representative, that nature of work done by Development Officer under incentive bonus scheme is identical to nature of work done under contract of employment. Though in so many words reference has not been made to contract of employment in earlier decisions of Tribunal, purport of discussion in orders clearly indicates, that all aspects of matter had been considered by earlier Benches before coming to conclusion, that, deduction introspect of expenses is admissible from incentive bonus. In fact, identical question had come up before ITAT, Chandigarh Bench in ITO vs. Raj Kumar Sethi (supra) and it was held categorically, that incentive bonus was recompense for efforts put in by assessee beyond call of duty and for securing business and same was income from profession eligible for deduction of proven expenditure. Of course in that case, deduction was restricted to 40 per cent of bonus in absence of full details of claim. In fact, this is direct decision on subject which we can ill-afford to ignore. This Bench of Tribunal has also had occasion to consider similar question and allowed deduction to extent of 40 per cent from incentive bonus. Department officers themselves have allowed deduction for expenditure from incentive bonus varying between 25 per cent to 40 per cent (vide decision of CIT, Poona-1). Board s Circular referred to earlier also lays down guidelines, on basis of which, expenditure in this regard has to be regulated. In fact of such overwhelming authority, we fail to see how claim of assessee for deduction of expenditure from incentive bonus can be totally ignored. For same reasons, as clearly discussed in (1982) 14 TTJ 160 (Chd): (1982) 1 ITD 907 (Chd), we hold that incentive bonus is recompense for extra efforts taken by assessee beyond call of duty and, therefore, same does not form part of salary under contract of employment. We therefore, uphold claim of assessee that incentive bonus is income from profession. As to quantum of deduction to be allowed in this behalf, Board s Circular referred to earlier lays down, that ad hoc deduction upto 25 per cent could be allowed in absence of separate figures in respect of first year s commission and renewal commission. expenditure claimed by assessee in this behalf is Rs. 36,359 inclusive of depreciation on motor car and furniture. It is not clear whether accuracy of claims in this behalf has been verified by ITO. Obviously same has not been done since he had not applied his mind in this behalf. We have, therefore, no other alternative except to remit matter back to record of ITO to enable him to examine correctness of claim in this behalf and allow deduction to extent supported by evidences in this behalf. In event of evidence not being available, guidelines issued in Board s Circular may be availed of for regulating deduction. As regards claim for depreciation, ITO may regulate deduction in this behalf on basis of above directions. As regards claim for exemption under s. 10(1A) in respect of conveyance allowance and additional conveyance allowance, we uphold claim of assessee in this behalf particularly in view of certificate given by LIC, that same was reimbursement of expenses incurred wholly, necessarily and exclusively in performance of duties of office as Development Officer. Hence we direct, that sum of Rs. 18,936, should be fully exempted. As regards interest, ITO is directed to make consequential change in same line in light of above directions. In result, appeal is allowed in part. *** L. T. MULCHANDANI v. FIRST INCOME TAX OFFICER