9911796707
TMI Blog1986 (1) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... rch 31, 1970, the employer terminated the services of the assessee by giving him the requisite three months' notice. In addition to the pay and salary for the period of notice, the employer paid to the assessee a sum of Rs. 24,933. The question was whether this amount could be treated as profits in lieu of salary within the meaning of sub-clause (i) of clause (3) of section 17 of the Income-tax Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The amount in question was an ex gratia payment, i.e., it was paid by the employer voluntarily without being under any obligation to pay it. Section 17 deals with salary, perquisite and profits in lieu of salary. Clause (3) reads : "(3) ' profits in lieu of salary ' includes (i) the amount of any compensation due to or received by an assessee from his employer or former employer at or in conn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he employment of the company up to any particular age. Under the conditions of service, his services were liable to be terminated on giving three months' notice without assigning any reason. Under the circumstances, it cannot be said that the assessee was entitled to remain in service for any period longer after the requisite notice has been given or that the employer was under any obligation to p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umstances of the case, the amount of Rs. 24,933 received by the assessee could be treated as income under the charging section or under the section dealing with the computation of income of the assessee ? "
is answered in the negative, in favour of the assessee and against the Department.
There will be no order as to costs.
M. G. MUKHERJI J.-I agree. X X X X Extracts X X X X X X X X Extracts X X X X
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