appeal is by assessee who is Development Officer in Life Insurance Corporation (LIC). assessee, for purpose of carrying out of his development work, was paid conveyance allowance of Rs. 25,417 by LIC. Out of this, assessee claimed exemption under section 10(14) of Income- tax Act, 1961 ('the Act') of Rs. 13,377. assessee later revised its claim whereby entire amount or Rs. 25,417 was claimed as exempt. ITO wanted assessee to produce evidence and vouchers. ITO then considered section 10(14) and was of view that only that amount would be exempt which has been actually spent for meeting out official duties. He then discussed duties of Development Officer and since assessee did not maintain details and vouchers and also referred to certificate ensued by LIC which categorically provided that for purpose of tax calculation t h e y have considered Rs. 13,377 as exempt under section 10(14). He, accordingly, disallowed Rs. 12,000 claimed by assessee. In view of reasons mentioned by ITO, AAC confirmed his order. AAC did not accept reasoning provided by assessee that assessee was entitled to additional deduction of 40 per cent of Rs. 50,000 which represented incentive bonus paid to assessee. reliance placed on Chandigarh Bench decision for this proposition was rejected. Before us, Shri B.L. Chopra, learned counsel for assessee, referred us to salary certificate issued by LIC. He drew our attention to paragraph No. 4 of salary certificate which reads as under: "Certified that total amount of salaries, etc., paid to Shri K.C. Gokani, as stated above, includes conveyance allowance of Rs. 35,417.35 paid ton meet expenses of conveyance incurred in performance of duties of his office. Certified further that out of such payment sum of Rs. 13,377.45 has been treated as exempt from tax under section 10(14) of Income-tax Act, 1961 for purpose of deduction tax at source." He also drew our attention to circular issued by LIC as circular No. 43 of 1979 dated 19-12-1979. According to Shri Chopra, assessee, in fact, had made lesser claim while according to Chandigarh Bench decision in case of ITO v. Rajkumar Sethi [1982] 1 ITD 907 assessee was entitled to 40 per cent of incentive bonus as additional deduction while department was allowing 20 per cent of such incentive bonus as deduction. According to Shri Chopra, since actual expenditure on conveyance was very much higher and assessee had to meet same from incentive bonus also this additional deduction of 40 per cent was claimed and was allowed. He, therefore, pleaded that assessee is entitled to deduction of Rs. 25,417 plus Rs. 20,000. He also submitted that additional ground of claiming this as deductible was raised before AAC. He relied on Gujarat High Court decision in case of CIT v. Cellulose Products of India Ltd. [1985] 151 ITR 499 (FB). 2. Shri Ruhela, learned departmental representative, on other hand, submitted that granting of conveyance is one and claim of expenditure on conveyance is another. Shri Ruhela further submitted that assessee was specifically asked to provide details as well as evidences in support of his claim of expenditure which assessee did not produce. Shri Ruhela then referred to salary certificate and submitted that then LIC themselves are allowing exemption of Rs. 13,377 only, this further goes to support departmental view that only to that extent section 10(14) exemption is applicable. As regards claim of 40 per cent deduction, same was never made before ITO. Shri Ruhela, therefore, submitted that without any detail, further deduction is not permissible. 3. We have heard parties and considered materials that have been placed on record. We have already reproduced earlier paragraph No. 4 of salary certificate, which says that conveyance allowance that was provided to assessee was to tune of Rs. 25,417. circular dated 19-12-1979 issued by LIC to its various offices is reproduced below: "LIFE INSURANCE CORPORATION OF INDIA, DIVISIONAL OFFICE, AJMER. Ref. Dev/Addl. CA. Dated 19-12-1979 Circular No. 43 of 1979 All Branches under Ajmer Division Reg.: Income-tax deductions from additional conveyance allowance. We reproduce herein below Central Office Circular Ref. DD/ZD/58 of 1979 dated 4th December, 1979 on above subject which is self explanatory: 'Please refer to Central Office Accounts Department Circular Ref. Accts./Income-tax/CA/ADER dated 4th July, 1979. Recently, clarification from us regarding exemption for purpose of deduction of income-tax additional conveyance allowance was sought. You are aware that additional conveyance allowance is granted by Corporation to Development Officers to off-set fuel and other expenses that would have been incurred by concerned officers during course of year to procure new business by contacting proponents, agents and also by extensively touring area allotted to them. As far as granting of tax exemption is concerned, it appears different tax authorities follow different procedures in different regions. Therefore, it has been decided that following procedures may be followed for deduction of tax at source at time of payment of additional conveyance allowance by our offices: (a) Whether additional conveyance allowance is taxed to full by income-tax authorities, same practice may be followed and concerned officer has to claim refund by filing his tax returns. (b) Whether income-tax authorities allow only fixed sum out of additional conveyance allowance as exempt from tax, we may also treat this sum as exempt from tax for calculating amount of tax to be deducted at source. (c) Whether exemption is granted on percentage basis, that is to say, 80 per cent of additional conveyance allowance or 90 per cent of additional conveyance allowance as case may be, by income-tax authorities, offices can also allow for this percentage while making calculations for deduction at source. It is also necessary that for ensuring that proper deduction of tax at source is made by our offices, copy of duly certified assessment order given by income-tax authority to concerned Development Officer should also be obtained and kept as record.' Please see that instructions contained in above connection are strictly complied with while releasing additional conveyance allowance to Development Officers. Sd./- R.N. Jhingan, Assistant Divisional Manager." It sounds from aforementioned circular that employer knowing fully well that allowance granted by him is towards official purposes only, which is, in fact, minimum that is paid to employees, instead of boldly saying that entire sum so granted is exempt under section 10(14), has avoided owning of such responsibility. This is so in view of its own mentioning that offices are advised to allow exemption to extent so treated by administrators. If further says that different authorities are exempting different amounts. It is admitted fact that such officers shall get maximum amount as fixed or arrived at by employer irrespective of quantum of expenditure incurred by employee. employer has realised that such conveyance allowances have to be provided in interest of their business, considering area of jurisdiction under such officers. amount is calculated as proportion of new business developed and allowance varies in relation to business developed each month. In our view, calling this conveyance paid as on allowance is misnomer and is in fact reimbursement of expenditure. Merely because, it is called as allowance, its character does not change from reimbursement of expenditure incurred to that of allowance. We are, therefore, of view that entire amount of Rs. 25,417 should be exempt under section 10(14) and we hold accordingly. 4. As regards additional ground of claiming of deduction at rate of 40 per cent of incentive bonus, assessee filed copies of assessment orders up to assessment year 1984-85, where ITO has considered same and had allowed assessee deduction so claimed. assessee had preferred this additional ground before AAC, who had rejected same for reason that assessee did not make any claim before ITO and it required further examination for which reliance was placed on Calcutta High court decision in case of Jute Corpn. of India Ltd. v. CIT [1981] 131 ITR 412, we reject this ground for same reason. Moreover, relief already granted covers all actual expenditure incurred. 5. In result, appeal of assessee is partly allowed. *** K.C. GOKANI. v. INCOME TAX OFFICER