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TMI Blog2024 (4) TMI 548X X X X Extracts X X X X X X X X Extracts X X X X ..... eal state that Ld. AO added an amount of Rs. 2,00,00,000/- received by the respondent-assessee from his employer INX Media after his termination from service and Rs. 13,08,444/- received as perquisites from the employer has been added in the total income of the assessee as profits in lieu of salary for A.Y. 2009-10, vide assessment order dated 30.03.2011 passed u/s 143(3) of the Income Tax Act, 1961. Assessee preferred an appeal against the order passed by the AO before Ld. CIT(A). Ld. CIT(A) allowed assessee's appeal and set aside AO's addition thereby leading to this appeal. 3. Revenue Department has filed this appeal raising following grounds : "1. Whether the Ld. CIT(A) was justified in holding that the payment of Rs. 2 crore receive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m service and Rs. 13,08,444/-received for the purchase of new car, can be treated as profits in lieu of salary as provided u/s17(3)(i) and taxable ? 7. Ld. DR has argued that the Assessing Officer was right in treating Rs. 2 crore received by the assessee from his employer after his termination as compensation amount as component of salary along with Rs. 13,08,444/- as perquisites. He has further argued that Ld. CIT(A) has failed to differentiate the facts of the instant case with the facts of referred case declared by the Delhi High Court reported in CIT vs. Deepak Verma, (2010) 194 taxman 265 (Delhi) as the assessment in that case was pertaining to the A.Y. 2001-02 i.e. before the insertion of Section 17(3)(iii) in the Act with effect fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herein Hon'ble Gujarat High Court while interpreting Section 17 of the Act, held that payment of ex gratia compensation received by the employee u/s 17(3) if voluntary in nature without being any obligation on part of employer to pay any further amount to assessee in terms of service rules, it would not amount to compensation in terms of section 17(3)(i). 10. It is clear that the Ld. AO while making addition of Rs. 2,13,08,844/- u/s 17(3)(i) has relied upon C.N.Badami vs. CIT [1999] 240 ITR 263 (Mad) and P.Arunachalam vs. CIT [2000] 240 ITR 827 (Mad). Hon'ble Madras High Court in C.N.Badami (supra), has held that the amount received for encashment of leave salary would be a profit in lieu of salary and taxable under "voluntary Separation P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 263. We, therefore, do not permit the learned D.R. to transgress the boundaries of his arguments." In the present appeal, neither Ld. AO nor Ld. CIT(A) has considered the point raised by Ld. DR and the scope of arguments of ld. DR in the present appeal has to confine to the grounds taken in the appeal and he cannot be permitted to set up altogether a new case and assume his position as that of Ld. CIT under section 263 of the Act. 12. As the payment of ex-gratia compensation was voluntary in nature without there being any obligation on the part of employer to pay further amount to assessee in terms of any service rule. it would not amount to compensation in terms of section 17(3)(i) of the Act. The impugned addition was rig ..... X X X X Extracts X X X X X X X X Extracts X X X X
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