2013 (5) TMI 234 - AT - Income Tax

Deduction u/s.10(10C) - assessee had opted for voluntary retirement from State Bank of India under Exist Option Scheme and has received Ex-gratia payment - disallowance of claim as exit option scheme did not fulfill the stipulated requirements of rule laid down in rule 2BA of Income tax Rules, 1962 - Held that - As decided in ITO vs. Shri Kanaiyalal Vadilal Bhavsar 2010 (1) TMI 961 - ITAT AHMEDABAD relying on CIT vs. G. V. Venugopal 2004 (12) TMI 35 - MADRAS High Court that there is no prohibition to the twin benefits in respect of the amount received under the voluntary retirement scheme - The mere fact that the relief has been spread over several years does not mean that the relief is not in respect of a particular assessment year, thus assessee is eligible to claim simultaneous benefit under section 10(10C) as well as section 89(1) in respect of the compensation received under the voluntary retirement scheme Further, it is well settled that if two reasonable interpretations of taxing statutes are possible, the one in favour of the assessee should be accepted. In favour of assessee.

Summary

Issues:
- Appeal against order of Ld. CIT (A)- XXI, Ahmedabad for assessment year 2007-08.
- Ex-parte decision due to absence of assessee.
- Disallowance of deduction u/s. 10(10C) by A.O.
- Appeal allowed by CIT (A) based on various judgments.
- Revenue's appeal before ITAT Ahmedabad.
- Assessee's claim for exemption u/s. 10(10C) based on similar cases.
- Decision based on judgments from different High Courts.
- Co-ordinate Bench's decision in favor of assessee.
- Similarity of facts with previous cases.
- Upholding CIT (A)'s order and dismissing Revenue's appeal.

Analysis:
1. The appeal was filed by the Revenue against the order of Ld. CIT (A)- XXI, Ahmedabad for the assessment year 2007-08. The case proceeded ex-parte as the assessee did not appear but submitted written submissions. The dispute revolved around the disallowance of deduction u/s. 10(10C) by the Assessing Officer (A.O.) for an ex-gratia payment received by the assessee upon voluntary retirement from State Bank of India.

2. The CIT (A) allowed the appeal of the assessee, leading the Revenue to appeal before the ITAT Ahmedabad. The grounds of appeal primarily questioned the CIT (A)'s decision to delete the addition of Rs. 5,00,000/- u/s. 10(10C) based on various judgments from different ITATs and High Courts. The Revenue argued that the decisions cited by CIT (A) were not directly applicable to the case at hand as they pertained to different schemes.

3. The ITAT Ahmedabad considered the submissions made by both parties. The assessee claimed that the facts of their case were similar to previous cases where deductions u/s. 10(10C) were allowed. The ITAT noted the co-ordinate Bench's decision in favor of the assessee in similar cases, emphasizing the importance of identical factual scenarios in determining the outcome of such appeals.

4. The ITAT referred to various judgments from different High Courts, such as the decision of the Madras High Court, to support the allowance of deductions u/s. 10(10C) in cases of voluntary retirement. The ITAT upheld the CIT (A)'s order based on the similarity of facts with previous cases and the absence of contradictory evidence brought forth by the Revenue. Consequently, the appeal of the Revenue was dismissed, affirming the decision in favor of the assessee.