Dismissing the appeal of the assessee the Court held that ;if an allowance is paid to the assessee to meet his personal expenses at the place where the duties of his office are ordinarily performed, it is not exempt under S. 10(14) of the Act. Allowance such as city compensatory allowance necessitated by the high cost of living in big cities and not granted with reference to the nature of duties but exclusively with reference to the place of posting is not exempt from tax under S.10(14) of the Act. For being exempt under S 10(14) of the Act, an allowance should have specifically been granted wholly in the performance of duties. ( AY. 2001-02 to 2003-04)
Sun Outsourcing Solutions P. Ltd. v. CIT (2018) 407 ITR 480/ 171 DTR 358/ 305 CTR 537 (T&AP) (HC)
S. 10(14) : Special allowance or benefit -Allowance received by employee to cover expenses incurred wholly in performance of duties —Extra payment to meet costs in Foreign location is not entitled to exemption. [ S.15, 17 , 192 ]
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