2012 (6) TMI 806 - AT - Income Tax

Whether the CIT(A) has erred in law and on facts in deleting the addition u/s 10(10C)? - Held NO - There is no prohibition to the twin benefits in respect of the amount received under the voluntary retirement scheme. The word salary as defined in s. 17 includes any profit in lieu of salary, which has been defined in s. 17(3) to include any amount of compensation due or received by the assessee from his employer or former employer in connection with the termination of his employment. Hence, payment under the voluntary retirement scheme is covered by the word salary , which has been given a very wide definition in s. 17. Since the assessee is covered by s. 89, he will get both the benefits, which he has claimed for.

Summary

Issues:
1. Exemption under section 10(10C) of the Income Tax Act, 1961 for voluntary retirement scheme.

Analysis:
The case involved an appeal by the Revenue against the order of the ld. CIT(A)-XXI, Ahmedabad regarding the exemption of Rs. 5,00,000 under section 10(10C) of the Income Tax Act, 1961. The appellant contended that the exemption was not applicable as the voluntary retirement scheme did not meet the requirements of Rule 2BA of the Income Tax Rule. The assessee, an employee of S.B.I., opted for voluntary retirement under the SBI exit option scheme. The Assessing Officer added back the claimed exemption amount to the total income, leading to the appeal before the CIT(A), who deleted the addition after considering the assessee's submissions. The Revenue, dissatisfied with the decision, appealed to the tribunal.

During the hearing, it was noted that the assessee's case was similar to a previous tribunal decision in the case of ITO vs. Shri Kanaiyalal Vadilal. In that case, the tribunal allowed the deduction under section 10(10C) based on various High Court decisions supporting the assessee's claim for exemption. The tribunal emphasized that if there is a decision by any High Court on an issue and no contrary decision by another High Court, the decision of the former should be followed unless there is a decision by the jurisdictional High Court. Therefore, based on the precedent and the absence of conflicting judgments, the tribunal upheld the CIT(A)'s order and dismissed the Revenue's appeal.

In conclusion, the tribunal dismissed the Revenue's appeal, confirming the deletion of the Rs. 5,00,000 addition under section 10(10C) of the Income Tax Act, 1961. The decision was based on the principle of following High Court decisions in the absence of conflicting judgments, as established in previous tribunal rulings. The order was pronounced on 29.06.2012.