1. Heard learned counsel for the parties. The appeal was admitted on July 17, 2001, to consider the following substantial question of law :

" Whether, on the facts and circumstances of the case, the learned Income-tax Appellate Tribunal was justified in holding that the conveyance and additional conveyance allowance paid to the appellant who is an employee of the LIC is not exempt under section 10(14)(ii) of the Income-tax Act, 1961 ?"

2. The appellant is an officer in the Life Insurance Corporation of India and posted at Sriganganagar. During the course of assessment, it was noticed that the assessee has claimed exemption of conveyance and additional conveyance allowance under section 10(14)(ii) of the Income-tax Act,1961. The relevant provision of section 10(14)(ii) reads as under :

" Section 10(14)(ii) any such allowance granted to the assessee either to meet his personal expenses at the place where the duties of his office or employment of profit are ordinarily performed by him or at the place where he ordinarily resides, or to compensate him for the increased cost of living as may be prescribed and to the extent as may be prescribed."

3. Under sub-clause (i) of section 10