JUDGMENT : G.T. Nanavati, J. 1. The following question of law has been referred to this court by the Income-tax Appellate Tribunal under section 256(1) of the Income Tax Act, 1961 : "Whether, on the facts and in the circumstances of the case, the claim of the assessee for standard deduction on the amount of pension was justified ? " 2. During the previous year relevant to the assessment year 1977-78, the assessee received Rs. 3,737 by way of salary and arrears of salary and Rs. 7,260 by way of pension. The assessee thus appears to have retired during that year and, therefore, for a part of that year he received salary and for the remaining part he received pension. The assessee claimed a deduction of Rs. 2,110 on the total amount of salary and pension received by him. 3. The Income-tax Officer granted proportionate standard deduction of Rs. 7,045 (sic) in respect of the salary income but refused to grant any standard deduction on the income received by the assessee by way of pension. 4. The assessee, therefore, filed an appeal to the Appellate Assistant Commissioner but the appeal failed. 5. The Tribunal allowed the second appeal filed by the assessee and, therefore, the Commissioner of Income-tax has approached us by way of the present reference. 6. What is contended by learned counsel appearing for the Revenue is that, under section 15 of the Act, as it then stood, standard deduction was allowable only if there was actual expenditure incidental to the employment. He further submitted that, in the case of a pensioner, there cannot be any expenditure incidental to the employment and, therefore, no standard deduction could have been allowed in respect of the income received by way of pension. Section 16(1) as it then stood read as under : "16. Deductions from salaries. - The income chargeable under the head 'Salaries' shall be computed after making the following deductions, namely : (i) in respect of expenditure incidental to the employment of the assessee, a sum calculated on the basis provided hereunder, namely :- (a) where the salary derived from such employment does not exceed Rs. 10,000 20 per cent. of such salary; (b) where the salary derived from such employment exceeds Rs. 10,000 Rs. 2,000 plus 10 per cent. of the amount by which such salary exceeds Rs. 10,000 or Rs. 3,500 whichever is less : . 10,000 20 per cent. of such salary; (b) where the salary derived from such employment exceeds Rs. 10,000 Rs. 2,000 plus 10 per cent. of the amount by which such salary exceeds Rs. 10,000 or Rs. 3,500 whichever is less : . . . . Provided that- (i) where the assessee is in receipt of a conveyance allowance from his employer ; or (ii) where any motor car, motor cycle, scooter or other moped is provided to the assessee by his employer for use by the assessee, otherwise than wholly and exclusively in the performance of his duties ; or (iii) where one or more motor cars are owned or hired by the employer of the assessee and the assessee is allowed the use of such motor car or all or any of such motor cars, otherwise than wholly and exclusively in the performance of his duties, the deduction under this clause shall not exceed one thousand rupees. . . . " 7. It was contended by him that the words "in respect of expenditure incidental to the employment" also indicate that the said deduction was to be made available only if there was some expenditure incidental to the employment. Since the deduction was related to the expenditure, if there was no expenditure, there was no scope for granting any deduction. Thus, learned counsel has relied upon the phraseology of the section in support of his contention and fairly stated that there is no decision of any court which would support his contention. He fairly drew our attention to the decision of the High Court of Punjab and Haryana (CIT v. Saroop Krishan, [1985] 153 ITR 1), wherein it was held otherwise. 8. What happened in that case was that when the reference came up for hearing before a Division Bench consisting of B.S. Dhillon and S.P. Goyal JJ., Dhillon J. was of the opinion that, in view of the definition of the word "salary" for the purposes of sections 15 and 16 of the Act, the expression "in respect of expenditure incidental to the employment of the assessee" would mean "in respect of expenditure incidental to past or present employment of the assessee". Goyal J., on the other hand, held that in spite of the fact that, for the purpose of section 16, the word "salary" included annuity or pension, for the purpose of claiming deduction, it was not enough that the pension had been declared as salary but it had to be further shown that the amount had been spent by the assessee on matters relating to his employment as covered by the four clauses of section 16 prior to its amendment, and that, if the expression "in respect of expenditure incidental to the employment of the assessee" was to be interpreted as contended by the assessee, then that would render that expression a mere surplusage and such an interpretation would run counter to the principle enunciated in Dinesh Chandra Sangma's case, AIR 1978 SC 17 . In view of the difference of opinion between the two learned judges, the matter was referred to a third judge. Tewatia J. held that the view expressed by Goyal J. was preferable and further held that, by virtue of the deeming provision contained in section 17 whereby pension is regarded as salary, an employee would be treated in employment and expenditure incurred for the purpose of securing his pension had to be treated as expenditure related to his employment. The learned judge observed that (at page 8) : "Salary is received by a person who is in present employment and, therefore, the pensioner is to be treated, by virtue of the deeming provision in question, in present employment for the purpose of section 16(i) of the Act". The learned judge also observed that (at page 10) : "where two interpretations are possible in regard to a taxing statute, the judicial consensus favours the acceptance of the one that is in favour of the assessee". 9. What is submitted by learned counsel for the Revenue is that the view expressed by the Punjab and Haryana High Court does not appear to be correct for the reason that, on the basis of one fiction, you cannot create another fiction and also because it is not correct to say that, if two interpretations are possible, the one in favour of the assessee should be preferred. It was submitted that, merely because pension is included within the meaning of the word "salary", the pensioner cannot be deemed to be in active employment and even where he does not spend anything for the purpose of getting pension, it cannot be further deemed that he had spent some amount and it was expenditure for the purpose of his employment. But, none the less, we agree with the final conclusion reached by the Punjab and Haryana High Court. 10. Prior to its amendment in 1974, section 16 read as under : "16. Deductions from salaries. - The income chargeable under the head 'Salaries' shall be computed after making the following deductions, namely :- (i) any amount not exceeding five hundred rupees, expended by the assessee on the purchase of books and other publications necessary for the purpose of his duties ; . . . . (iii) any amount paid by the assessee in respect of taxes on professions, trades, callings or employments levied under any State or Provincial Act ; (iv) where the assessee is not in receipt of a conveyance allowance, whether as such or as part of his salary, in respect of expenditure on travelling for the purposes of his employment, a sum calculated in respect of each calendar month or part thereof comprised in the period of his employment during the previous year, on the basis provided hereunder, namely :- Rs. (a) where the assessee owns a motor car which is used for the purposes of his employment 200 (b) where the assessee owns a motor cycle, scooter or other moped which is used for the purposes of his employment 75 (c) in any other case 50 (v) any amount actually expended by the assessee, not being an amount expended on the purchase of books or other publications, or on entertainment or on the maintenance of a conveyance which, by the conditions of his service, he is required to spend out of his remuneration wholly, necessarily and exclusively in the performance of his duties. " 11. So, before its amendment in 1974, the basis adopted by the Legislature for the purpose of granting deduction was actual expenditure incurred by the assessee belonging to the salaried class for the purposes mentioned in that section. " 11. So, before its amendment in 1974, the basis adopted by the Legislature for the purpose of granting deduction was actual expenditure incurred by the assessee belonging to the salaried class for the purposes mentioned in that section. However, in 1974, the Legislature thought it fit to amend section 16 and from the nature of the amendment made, we can say that for the purpose of granting deduction it has changed the basis whereas formerly the basis was actual expenditure, after the amendment the basis was a certain minimum and a certain maximum. Even if the assessee had not spent Rs. 2,000, he was to be given a deduction of Rs. 2,000 provided the proviso did not apply to him. Even if the assessee had spent more amount, he was not to be given a deduction of more than Rs. 3,500. This change in the basis clearly reflects the intention of the Legislature. It wanted to do away with the basis of actual expenditure and instead wanted to introduce a new basis where the actual expenditure did not have much role to play, except for the purpose of claiming something higher than the minimum which was again made subject to a certain maximum. It is in this context that we have to construe the words "in respect of expenditure incidental to the employment" contained in section 16 of the Act and, if, in this context, the said words are construed, then that would mean that, towards the expenditure or in lieu of the expenditure incidental to the employment, deduction has to be granted. Even though the word "expenditure" is used in that phrase, we cannot construe the section so as to mean that the deduction under that head was allowable only if the actual expenditure was incurred because that would amount to granting a back door entry to the basis which was given up by the Legislature while amending section 16. It appears that the Legislature assumed, and rightly so, that no matter whether a person is in actual employment or he is a pensioner, he would be required to incur certain expenditure in order to get his salary or pension, and, proceeding on that assumption, it has provided for a deduction under that head. It appears that the Legislature assumed, and rightly so, that no matter whether a person is in actual employment or he is a pensioner, he would be required to incur certain expenditure in order to get his salary or pension, and, proceeding on that assumption, it has provided for a deduction under that head. Thus, the words "in respect of expenditure incidental to the employment" only suggest the nature of the deduction or the head under which the deduction was to be granted, and they were not employed by the Legislature with a view to make the actual expenditure a condition precedent to the grant of deduction. In our opinion, the said words are descriptive of the nature of deduction to be granted and no further implications can be read therein. 12. For the reasons stated above, the question which is referred to this court is answered in the affirmative, that is, against the Revenue and in favour of the assessee. No order as to costs.