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2008 DIGILAW 2255 (MAD)

The Commissioner of Income Tax v. R. Dhanabalan

2008-07-04

K.RAVIRAJA PANDIAN, P.P.S.JANARTHANA RAJA

body2008
Judgment :- K. Raviraja Pandian, J. The Tax Case Appeal is filed against the order dated 9. 2005 in ITA No.1681/Mds/2004 on the file of the Income Tax Appellate Tribunal, Madras C Bench by raising the following substantial question of law: "Whether the amount paid to employees under the Voluntary Retirement Scheme is entitled for deduction?" 2. The assessee was an employee of Indian Bank. The assessee retired from service under the Voluntary Retirement Scheme and received a sum of Rs.5,00,000/- from the employer Bank as ex-gratia, which he claimed exemption as per Section 10(10-C) of the Income-tax Act. Balance ex-gratia was admitted as income. However, while working out the tax payable on such income, the assessee claimed relief under Section 89(1). The assessing officer disallowed the claim of the assessee for the relief under Section 89(1) of the Act on the ground the assessee had availed the exemption of Rs.5,00,000/-under Section 10(10-C) of the Act. Aggrieved by the same, an appeal is preferred by the assessee before the Commissioner of Income-tax (Appeals), who allowed the appeal by relying on the judgments of this Court reported in 245 ITR 826 and 206 ITR 531. Aggrieved by the same, the revenue preferred appeal before the Income-tax Appellate tribunal, which dismissed the appeal preferred by the revenue following the decision reported in 273 ITR 307 in the case of CIT Vs. G.V. Venugopal. The correctness of the said order is canvassed by the appellant in this present appeal. 3. Learned counsel appearing for the revenue submits that the issue involved in this appeal is covered by a decision of this Court in the case of Commissioner Of Income-Tax V.S G.V. Venugopal reported in (2005) 273 ITR 307. 4. This Court in the case of Commissioner Of Income-Tax V.S G.V. Venugopal reported in (2005) 273 ITR 307 while dismissing the appeal, held as follows: "....the second proviso to section 10(10C) only refers to exemption claimed in any other year. Every assessment year is a self-contained unit and the mere fact that the relief under section 89 had been spread over several years, did not mean that the relief was not in respect of a particular assessment year. There was no prohibition to the twin benefits in respect of the amount received under the voluntary retirement scheme. Every assessment year is a self-contained unit and the mere fact that the relief under section 89 had been spread over several years, did not mean that the relief was not in respect of a particular assessment year. There was no prohibition to the twin benefits in respect of the amount received under the voluntary retirement scheme. The relief contemplated under section 89(1) is aimed to mitigate hardship that may be caused on account of the high incidence of tax due to progressive increase in tax rates. Payment under the voluntary retirement scheme is covered by the word "salary" which has been given a very wide definition in section 17. Since the assessee was covered by section 89, he would get both the benefits..." 5. Therefore, following the above said judgment, this appeal is dismissed as the question of law now raised is already decided against the revenue.