Dear RNM Consultants
LTA : Evidence of Expenses Employers, while processing 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 Jan 21, 2009. 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. Case Details CIVIL APPEAL NO.993 OF 2005 / WITH NO. 992 OF 2005 COMMISSIONER OF INCOME TAX & ANR. V/s LARSEN & TOUBRO LTD 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.