9911796707
TMI Blog1991 (1) TMI 192X X X X Extracts X X X X X X X X Extracts X X X X ..... led to receive half month salary for each completed year of service. Since the assessee had worked with the said company for 14 years, he was entitled to gratuity of an amount equal to 7 months salary. However, as per the gratuity scheme of the said company, the assessee would have been entitled to receive gratuity at the rate of 1 month salary, if he had completed 15 years of service with the said company. During the negotiations with the employer, the assessee had indicated the financial loss of Rs. 21,500, if he leaves M/s. Voltas Ltd. as was insisted by the employer. The employer, therefore, agreed to compensate the assessee with the loss of Rs. 21,500, he would have incurred for leaving M/s. Voltas Ltd. before completion of 15 years. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt from this, he also took up an additional ground whereby he challenged the action of the ITO in "reopening" the assessment under section 143(2)(b) of the Act. 7. The first appellate authority, however, rejected both the aforesaid contentions of the assessee. Referring to section 143(2)(b) of the Act, he was of the view that the ITO had rightly took action under that section, as it was necessary/expedient to verify the correctness of the exemption claimed by the assessee in respect of Rs. 21,500. Referring to section 17(3)(i) of the Act, he, was of the view that the compensation received by the assessee from his employer cannot be treated as a capital receipt and was exigible to tax by way of "Profits in lieu of salary." 8. Being aggr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of the first appellate authority. In this connection, he invited my attention to section 143(2)(b) of the Act, along with Explanation thereto to urge that the provisions for re-opening the assessment under section 148 of the Act were quite different from the provisions contained in section 143(2) of the Act. In this view of the matter, he submitted that the aforesaid order of the Tribunal should not be followed, as the Tribunal has given its decision on the issue of "re-opening" on the basis of the provisions of Section 147(b) of the Act. As regards the merits of the case, he submitted that on plain reading of section 17(3) of the Act, it cannot be denied that Rs. 21,500 was taxable as "Profits in lieu of salary". In this connection, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1) an assessment under sub-section-- (1) shall be deemed to be incorrect, inadequate or incomplete in a material respect, if-- (a) the amount of the total income as determined under sub-section (1) is greater or smaller than the amount of the total income on which the assessee is properly chargeable under this Act to tax ; or (b) the amount of the tax payable as determined under sub-section (1) is greater or smaller than the amount of the tax properly payable under this Act by the assessee." It would appear from the above that the conditions for "re-opening" the assessment under section 147/148 are quite different from the proper assessment required to be framed under section 143(1)/143(2) of the Act. In this view of the matter ..... X X X X Extracts X X X X X X X X Extracts X X X X
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