9911796707
TMI Blog2003 (4) TMI 36X X X X Extracts X X X X X X X X Extracts X X X X ..... a an employee who ceases to be in the employment during the previous year - we answer this question in the negative, i.e.," in favour of the Department - Whether the Tribunal was right in holding that interest for the broken period should not be considered as part of the purchase price, but should be allowed as revenue expenditure in the year of purchase of securities?" – This question is answered in the affirmative, i.e., in favour of the assessee - - - - - Dated:- 16-4-2003 - Judge(s) : S. H. KAPADIA., J. P. DEVADHAR. JUDGMENT The judgment of the court was delivered by S.H. KAPADIA J.-By order dated March 13, 1995, passed by the Tribunal under section 256(1) of the Income-tax Act, 1961, the following three questions have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t relatable to the previous year. It was argued that encashment of unavailed leave on retirement was a non-periodic payment and, consequently, section 40A(5) was not applicable to such payment. In this connection reliance was placed on the judgment of the Bombay High Court in the case of CIT v. Colgate Palmolive (India) Pvt. Ltd. [1994] 210 ITR 770. It was argued that encashment of unavailed leave on retirement was a one-time payment and not a recurring payment. That, looking to the definition of salary for the purposes of section 40A(5), anyone-time payment or payment which is not relatable to any period covered by the previous year cannot be taken into account for computation of the ceiling prescribed under section 40A(5). That the ceilin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... employer. In the circumstances, we hold that the word "salary" in section 40A(5)(a)(i) would cover retirement benefits like pension as also encashment of earned leave. Accordingly, we answer this part of the question in favour of the Department and against the assessee. The second part of question No.2 is: Whether the Tribunal was right in holding that two separate limits have to be applied for computing disallowance under section 40A(5) qua an employee who retires and qua an employee who ceases to be in the employment during the previous year. Answer: In view of our judgment in the case of CIT v. Mercantile Bank Limited [1999] 237 ITR 676, we answer this part of the question in the negative, i.e.," in favour of the Department and aga ..... X X X X Extracts X X X X X X X X Extracts X X X X
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