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TMI Blog2016 (1) TMI 758X X X X Extracts X X X X X X X X Extracts X X X X ..... (iia) of the Income-tax Act is to the effect that the expression "salary" in that clause includes the pay, allowances, bonus or commission payable monthly or otherwise. Hence, the contention of the petitioner that the expression "salary" found in section 10(10) and section 10(10AA) of the Income-tax Act should be given a wider meaning than found in clause (h) of rule 2 of Part A of the Fourth Schedule is wholly untenable. Thus, the petitioner is not entitled to the grant of any part of the prayer made by him in the writ petition - Decided in favour of revenue - ITA No. 260, 261 and 269 of 2013 - - - Dated:- 2-12-2015 - MR. AJAY KUMAR MITTAL AND MR. RAMENDRA JAIN, JJ. For The Appellant : Mr. Manjit Singh Sarao, Advocate For The Respondent : Mr. Zora Singh Klar, Advocate AJAY KUMAR MITTAL, J. 1. This order shall dispose of a bunch of three appeals bearing ITA Nos. 260, 261 and 269 of 2013 as according to learned counsel for the parties, similar questions of law and facts are involved in all the appeals. For brevity, the facts are being extracted from ITA No. 260 of 2013. 2. ITA No. 260 of 2013 has been filed by the assessee under Section 260A of the Income T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3) of the Act vide order dated 28.12.2010 (Annexure A-1) at a total income of ` 8,41,860/-. The Assessing Officer made additions of ` 5 lacs claimed exempt under Section 10(10C) of the Act being amount of ex-gratia received under the Scheme of Voluntary Retirement from the State Bank of Patiala declaring it as not in conformity with the Rule 2BA of the Income Tax Rules, 1962 (in short the 1962 Rules ), ` 11,002/- on account of excess amount of gratuity and ` 37,102/- being excess amount of leave encashment both claimed exempt under Section 10 (10AA) of the Act. Feeling aggrieved, the assessee filed an appeal before the Commissioner of Income Tax (Appeals) [for brevity the CIT (A) ]. The CIT(A) vide order dated 25.5.2012 (Annexure A-2) partly allowed the appeal and deleted the disallowance of exemption under Section 10(10C) of the Act. However, the disallowance of claim ` 11,002/- on account of gratuity and ` 37,012/- of leave encashment under Section 10(10AA) of the Act were upheld by the CIT(A). Still dissatisfied, the assessee filed an appeal before the Tribunal who vide order dated 27.12.2012 (Annexure A-3) upheld the order of the CIT(A) and dismissed the appeal. Thereafter, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions 10(10) and 10(10AA) of the Act, the salary shall be determined as referred in Rule 2(h) of Part A of Fourth Schedule of the Act and no other payment or allowance other than dearness allowance if the terms of employment so permit, shall be taken into consideration. 8. Having enunciated the legal position as noticed above, we proceed to examine the factual matrix involved herein. The assessee retired from the service of State Bank of Patiala under 'Exit Option Scheme' floated by the said Bank vide circular dated 30.9.2006 and claimed exemption under Section 10(10C) of the Act amounting to ` 5 lacs on account of ex-gratia. The Assessing Officer disallowed the claim of the assessee and made addition of ` 5 lacs by observing that the said scheme was not in conformity with Rule 2BA of the 1962 Rules. The claims of the assessee regarding gratuity and leave encashment under Sections 10(10) and 10(10AA) of the Act were partially disallowed by the Assessing Officer and additions of ` 11,002/- and ` 37,012/- on that account were made. On appeal, the CIT(A) upheld the order of the Assessing Officer except deleting the disallowance of the assessee under Section 10(10C) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , it is relevant to reproduce the Explanation to section 10(10) of the Act:- Explanation In this clause and in clause 10 (AA), salary shall have a meaning assigned to it in clause (h) of Rule 2 of Part-A of the Fourth Schedule. 8. In view of the Explanation, the computation of benefit of gratuity and leave encashment, as contemplated u/s 10(10) and 10(10AA) are to be governed by the definition of 'salary' contained in the above Explanation and not by any agreement, as contended by the ld. AR, viz. 8th Bipartite Settlement on wage revision and other similar conditions between Indian Banks' Association and their Workmen. The definition of 'salary' as reproduced above is squarely and specifically applicable to section 10(10) and 10(AA) of the Act and, hence, any other definition of 'salary' cannot be imported and applied to such sections. 10. The authorities below on appreciation of material on record have concurrently recorded that the computation of benefit of gratuity and leave encashment under Sections 10(10) and 10(10AA) of the Act are to be governed by the definition of 'salary' as per Rule 2(h) Part A, Fourth Schedule. Learned ..... X X X X Extracts X X X X X X X X Extracts X X X X
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