COMMISSIONER OF INCOME TAX THIRUCHIRAPPALLI Vs. S RAJENDRAN

JUDGEMENT

(1.) THE Tax Case Appeal is filed against the order dated 30.12.2005 in ITA No.753/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. During the previous year relevant to the assessment year 2001-2002 the assessee retired from service under the Voluntary Retirement Scheme offered by the said Bank. On retirement, the assessee received a sum of Rs.9,40,430/- from the employer Bank as ex-gratia. THE ex-gratia had been worked out by the employer at 60 days salary for each completed year of service, or salary for the number of months of service left whichever was less. Out of the total ex-gratia received, the assessee claimed exemption of Rs.5,00,000/- under section 10(10C) of the 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 rejected the claim of the assesssee for the relief under Section 89(1) of the Act and passed the Assessment Order granting exemption under Section 10(10C) 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. 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.) THEREFORE, following the above said judgment, this appeal is dismissed as the the question of law now raised is already decided against the revenue.