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2010 (10) TMI 95 - HC - Income TaxCompensation under the Voluntary Retirement Scheme - simultaneous benefits under Section 10 (10 C) as well as Section 89 (1) of the Income Tax Act in respect of Compensation under the Voluntary Retirement Scheme - Herld that - there is no prohibition to the twin benefits in respect of the amount received under the voluntary retirement scheme - relief contemplated under Section 89 of the Act is aimed to mitigate the hardship that may be caused on account of the high incidence of tax due to progressive increase in tax rates and thus held that the benefits under Section 10(10-C) and 89 could be granted to the assesses - Appeal is dismissed
Issues:
Interpretation of simultaneous benefits under Section 10(10 C) and Section 89(1) of the Income Tax Act in respect of Compensation under the Voluntary Retirement Scheme. Analysis: The appeal before the High Court of Allahabad involved the substantial question of law regarding whether an assessee could claim simultaneous benefits under Section 10(10 C) and Section 89(1) of the Income Tax Act concerning Compensation under the Voluntary Retirement Scheme. The Revenue contended that the issue was settled by a Division Bench decision in a previous case where it was held that there is no prohibition to the twin benefits for the amount received under the voluntary retirement scheme. The relief under Section 89 aims to alleviate the hardship caused by high tax rates, and it was determined that benefits under both Section 10(10-C) and 89 could be granted to the assessees. Consequently, the Tribunal's decision in favor of the assessee was upheld, and the Revenue's appeal was dismissed. The High Court noted that a Special Leave Appeal related to a similar dispute from the Karnataka High Court had been rejected by the Apex Court on 2.2.2009. Furthermore, the Apex Court had also endorsed the same view in the case of Chandra Ranganathan and others Vs. Commissioner of Income Tax. In line with these decisions, the High Court answered the questions in favor of the assessee and against the Revenue, upholding the Tribunal's order. As a result, the appeal was dismissed, affirming the assessee's right to claim benefits under both Section 10(10 C) and Section 89(1) of the Income Tax Act in relation to Compensation under the Voluntary Retirement Scheme.
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