2001 (4) TMI 79 - HC - Income Tax

Summary

Issues:
1. Interpretation of section 10(13) of the Income-tax Act, 1961 regarding exemption of amount received from a superannuation fund.
2. Determination of whether conditions for exemption under section 10(13) were fulfilled.
3. Analysis of the treatment of payment from an approved superannuation fund as a perquisite under section 17(3)(ii) of the Act.

Interpretation of Section 10(13):
The case involved a dispute over the taxability of an amount of Rs. 60,437 received from an approved superannuation fund under section 10(13) of the Income-tax Act, 1961. The Income-tax Officer contended that if the conditions specified in section 10(13) were not met, the income should not be exempted. However, both the Commissioner of Income-tax (Appeals) and the Tribunal supported the assessee's claim that the amount should not be considered a perquisite under section 17(3)(ii) and therefore should not be taxed.

Fulfillment of Exemption Conditions under Section 10(13):
The assessee argued that since the payment was made from an approved superannuation fund during the relevant assessment year of 1987-88, the exclusion clause "not being an approved superannuation fund" was applicable. The counsel for the Revenue did not dispute this fact and acknowledged that the exclusion clause was removed from April 1, 1996. Therefore, the payment from the approved superannuation fund should not be treated as a perquisite under section 17(3) of the Act.

Treatment of Payment as Perquisite under Section 17(3)(ii):
The judgment clarified that since the payment was made from an approved superannuation fund during the assessment year when the exclusion clause was in effect, it should not be considered a perquisite. As a result, the question of whether the amount should be exempted under section 10(13) did not arise since it was not classified as a salary. The Income-tax Officer's disallowance was based on the exemption under section 10(13) and not on the classification of the amount as income. The judgment emphasized that the existence of the scheme after payment was irrelevant under section 17(3).

In conclusion, the High Court ruled in favor of the assessee, stating that the amount received from the approved superannuation fund should not be treated as a perquisite under section 17(3) and therefore was not taxable. The judgment disposed of the reference in favor of the assessee against the Revenue.