S.G. Aggarwal, Noida V. ITO, Muzaffarnagar

ITA 4073/DEL/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58787 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-02-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 23-02-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 07-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DK MISHR A
• Assessee Lawyers: PRAMOD KR JAIN CAS
• Keywords: Question of law; Benefit of exemption

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH G : NEW DELHI) SHRI I.P. BANSAL, JUDICIAL MEMBER AND BEFORE SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.4073/DEL./2011 (ASSESSMENT YEAR : 2007-08) SHRI S.G. AGGARWAL, VS. ITO, WARD 2 (2), A 135, TELECOM CITY, SECTOR 62, MUZAFFARNAGAR ( U.P.) NOIDA 201 307 (U.P.). (PAN : ABXPA4276A) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ANURAG JAIN & PRAMOD KR. JAIN, CAS REVENUE BY : SHRI D.K. MISHRA, CIT DR ORDER PER B.C. MEENA, ACCOUNTANT MEMBER : THIS APPEAL FILED BY THE ASSESSEE EMANATES FROM THE ORDER OF CIT (APPEALS), MUZAFFARNAGAR DATED 29.06.2011 FOR THE A SSESSMENT YEAR 2007-08. 2. THE GROUNDS OF APPEAL READ AS UNDER :- 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMING THE ACTION OF THE ASSESSING OF FICER OF DISALLOWING THE CLAIM OF EXEMPTION OF EX-GRATIA U/S 10(10C) OF THE I.T. ACT AND THEREBY MAKING ADDITION OF RS.5,00 ,000/- IS CONTRARY TO LAW AND ON FACTS OF THE CASE. 2. THE APPELLANT CRAVES LEAVE TO ADD, OR AMEND ANY GROUND OF APPEAL AT THE TIME OF HEARING. ITA NO.4073/DEL./2011 2 3. THE ASSESSEE IS AN INDIVIDUAL AND IS A RETIRED E MPLOYEE OF STATE BANK OF BIKANER & JAIPUR. THE RETURN OF INCOME WAS SUBMITT ED DECLARING INCOME AT 3,10,680/- ON 17.07.2007/ THE ASSESSEE HAS TAKEN V OLUNTARY RETIREMENT FROM THE SERVICE UNDER THE EXIT OPTION SCHEME 2005. T HE ASSESSEE HAS RECEIVED EX-GRATIA AMOUNT OF RS.5,66,694/-. OUT OF WHICH, A SSESSEE HAS CLAIMED DEDUCTION UNDER SECTION 10(10C) OF THE INCOME-TAX A CT OF RS.5 LAC. 4. WE HAVE HEARD BOTH THE SIDES ON THE ISSUE. WE F IND THAT THIS ISSUE IS COVERED BY THE DECISION OF VARIOUS BENCHES OF ITAT. IN THE CASE OF JEEVAN CHANDRA KABADWAL VS. DCIT IN ITA NO.3152/DEL/2010, THE ITAT DELHI BENCH D HELD AS UNDER :- 4. BEFORE US, IT WAS CLAIMED THAT THE ISSUE RAISED BY THE ASSESSEE IN THE PRESENT APPEAL IS COVERED IN FAVOUR OF ASSESSEE BY THE DECISION OF ITAT, KOLKATA BENCH IN THE CASE OF DCIT VS. KRISHNA GOPAL SAHA 121 ITD 368 (CAL.) THIRD MEMBER, WHEREIN THE ASSESSEE WAS AN EMPLOYEE OF STANDARD CHARTERED BANK AND HAD RECEIVED COMPENSATION OF RS. 18,87,798/- AS PER EARLY SEPARATION PLAN (ESP). HE CLAIMED DEDUCTION OF RS. 5 LAKH U/S 10(10C) OF THE ACT. THE EMPLOYER VIDE THEIR LETTER DATED 14.11.06 STATED THAT THE EMPLOYEES AVAILING THE SAI D ESP SCHEME ARE NOT ELIGIBLE FOR EXEMPTION U/S 10(10C) OF THE A CT AS THE SCHEME WAS NOT IN CONFORMITY WITH THE PROVISIONS OF RULE 2BA(I) TO (V). HOWEVER, THE SAID CONTENTION OF THE ASSESSEE WAS ACCEPTED BY THE TRIBUNAL FOLLOWING THE DECISION OF CALCUTTA HIGH COURT IN THE CASE OF SAIL DSP VR EMPLOYEES ASSOCIAT ION VS. UNION OF INDIA 262 ITR 638 (CAL.) AND IT IS HELD TH AT AN EMPLOYEE WHO TAKES VOLUNTARY RETIREMENT IS ENTITLED TO GET EXEMPTION U/S 10(10C) EVEN IF THE PAYMENT IS STRETC HED OVER A PERIOD OF YEARS AND FURTHER IT WAS HELD THAT THE PR OVISIONS OF SEC. 10(10C) SHOULD BE INTERPRETED IN A MANNER BENEFICIA L TO THE OPTEE FOR VOLUNTARY RETIREMENT AND IT WAS HELD THAT ASSESSEE WAS ENTITLED TO EXEMPTION U/S 10(10C) OF THE ACT. ITA NO.4073/DEL./2011 3 5. ON THE OTHER HAND, RELYING UPON THE ORDER OF AO AND CIT(A) LD. DR SUBMITTED THAT THE CLAIM MADE BY THE ASSESSEE WAS RIGHTLY DISALLOWED. 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS IN THE LIGHT OF MATERIAL PLACED BEFORE US. THE GROUND TAKE N BY AO FOR REJECTION OF THE CLAIM OF THE ASSESSEE IS THAT EMPL OYER OF THE ASSESSEE HAD STATED IN PARA 10 THAT THE PROPOSED SC HEME DID NOT COMPLY WITH RULE 10(10C) OF THE ACT AND NO BENEFIT OF EXEMPTION OF EX-GRATIA FOR THE INCOME TAX WAS INTEN DED IN THE SCHEME. SIMILARLY IN THE AFOREMENTIONED CASE OF DCI T VS. KRISHNA GOPAL SAHA THE EMPLOYER HAD STATED THAT EMP LOYEES AVAILING THE SAID ESP SCHEME ARE NOT ELIGIBLE FOR E XEMPTION U/S 10(10C) OF THE ACT. THEREFORE, THE FACTS OF THE PRE SENT CASE AND THE FACTS OF THE AFOREMENTIONED CASE OF KOLKATA BEN CH ARE SIMILAR AND FOR THE REASONING GIVEN THEREIN, WE FIN D NO JUSTIFICATION IN REJECTION OF THE CLAIM OF THE ASSE SSEE BY THE AO AND, THEREFORE, WE HOLD THAT LD. CIT(A) HAS WRONGLY REJECTED THE CLAIM OF THE ASSESSEE AND THE ADDITION MADE IN THIS REGARD IS DELETED AND APPEAL FILED BY THE ASSESSEE IS ALLOWED . IN THE CASE OF DCIT VS. KRISHNA GOPAL SAHA REPORTED IN 121 ITD 368 (KOL.)(TM), THE KOLKATA ITAT BENCH B, THIRD MEMBE R HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. SIMILARLY, THE IT AT AHMEDABAD BENCH B IN ITA NO.2557/AHD/2010 IN THE CASE OF ITO VS. SHRI VI JAYKUMAR B. BAROT HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY HOLD ING AS UNDER :- 2. IT WAS SUBMITTED BEFORE THE LEARNED CIT(A) THAT THE ASSESSEE WAS SERVING WITH STATE BANK OF INDIA AND H E OPTED FOR VOLUNTARY RETIREMENT SCHEME UNDER EXIT OPTION SCHEM E OF STATE BANK OF INDIA WHEREIN HE RECEIVED EX-GRATIA P AYMENT AND CLAIMED EXEMPTION U/S 10(10C) OF THE IT ACT IN RESP ECT OF THE AMOUNT RECEIVED UNDER EXIT OPTION SCHEME OF THE STA TE BANK OF INDIA. THE DETAILS WERE FURNISHED. THE DECISION IN THE CASE OF KOODATHIL KALLYATAN AMBUJAKSHAN, 309 ITR 113 (BOM.) WAS RELIED UPON. IT WAS ALSO SUBMITTED THAT ITAT AHMEDA BAD BENCH HAS FOLLOWED THE ABOVE DECISION IN THE CASE OF NATV ARLAL K. SHARMA VS ACIT IN ITA NO.780/AHD/2006 AND ALLOWED ITA NO.4073/DEL./2011 4 EXEMPTION CLAIMED BY THE ASSESSEE VIDE ORDER DATED 31-08-2007. THE LEARNED CIT(A) FOLLOWING THE ABOVE DECISIONS DE LETED THE ADDITION. 3. THE LEARNED COUNSEL FOR THE ASSESSEE AT THE OUTS ET SUBMITTED THAT THE ISSUE IS FURTHER CONSIDERED BY T HE ITAT AHMEDABAD BENCH IN THE CASE OF SMT. SHAKUNTALABEN NAGINKUMAR SHAH IN ITA NO.537/AHD/2010 DATED 31-08- 2010 AND THE APPEAL OF THE ASSESSEE HAS BEEN ALLOWED IN RESPECT OF THE SIMILAR SCHEME OF STATE BANK OF INDIA. HE HAS, THER EFORE, SUBMITTED THAT THE ISSUE IS COVERED IN FAVOUR OF TH E ASSESSEE. THE LEARNED DR DID NOT DISPUTE AND SUBMITTED THAT THE I SSUE IS COVERED IN FAVOUR OF THE ASSESSEE. 4. BY FOLLOWING THE SAME DECISION OF THE TRIBUNAL W E ARE OF THE VIEW THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE. THE DEPARTMENTAL APPEAL HAS NO MERIT. THE SAME IS DISMI SSED. IN THIS CASE ALSO, THE EMPLOYER WAS AN ASSOCIATE BA NK OF STATE BANK OF INDIA AND IN THE CASE UNDER CONSIDERATION ALSO, THE EMPLO YER IS STATE BANK OF BIKANER & JAIPUR WHICH IS ALSO AN ASSOCIATE BANK OF THE STATE BANK OF INDIA. IN THE CASE OF ITO VS. ROHIT KUMAR KANTILAL, ITAT A HMEDABAD BENCH A IN ITA NO.969/AHD/2010 HAS DECIDED THE DISUSE IN FAVOU R OF THE ASSESSEE BY HOLDING AS UNDER :- 3. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE W AS AN EMPLOYEE OF STATE BANK OF INDIA HAD FILED RETURN OF INCOME FOR ASSESSMENT YEAR 2008-09 DECLARING TOTAL INCOME OF R S.86,120/- . THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE H AD OPTED FOR EARLY RETIREMENT ON 30-04-2007 AND CLAIMED EXEMPTIO N U/S.10(10C) AMOUNTING TO RS.5 LAKH. THE EXEMPTION O F RS.5 LAKH U/S.10(10C) IS AVAILABLE IF THE VOLUNTARY RETI REMENT SCHEME SATISFIES THE GUIDELINES LAID DOWN IN RULE 2 BA OF THE INCOME-TAX RULES, 1962 THE AO ISSUED NOTICE U/S.148 OF THE ACT AND ASSESSEE FILED RETURN OF INCOME ON 08-01-20 10 DECLARING TOTAL INCOME OF RS.86,120/-. THE ASSESSME NT WAS COMPLETED DETERMINING ASSESSEES INCOME AT RS.5,86, 120/-. ITA NO.4073/DEL./2011 5 4. AGGRIEVED BY THIS ORDER OF ASSESSING OFFICER ASS ESSEE WENT IN APPEAL BEFORE LD. CIT(A). THE LD. CIT(A) DE LETED THIS ADDITION BY OBSERVING AS UNDER:- I HAVE CONSIDERED THE FACTS OF THE CASE, ASSESSING OFFICERS FINDINGS AND OBSERVATIONS IN THE ASSESSME NT ORDER AND DETAILED SUBMISSION MADE BY THE APPELLANT ALONG WITH VARIOUS DECISIONS OF ITATS, HIGH COURTS AND APEX COURT. THE INCOME-TAX APPELLATE TRIBUNAL, AHMEDABAD BENCH A IN THE CASE OF SMT. JAYA NARAYANAN AND OTHERS VS. ACIT, CIRCLE-15, AHMEDABAD IN ITA NO.1209/AHD/2007 AND OTHERS HAS PASSED ORDER IN FAVOUR OF THE APPELLANT FOLLOWING T HE CLAIM OF EXEMPTION U/S.10(10C) OF THE ACT. I HAVE G ONE THROUGH THE ORDER OF THE ASSESSING OFFICER AND THE ORDER OF THE HONBLE INCOME-TAX APPELLATE TRIBUNAL, AHMEDABAD BENCH A WITH REGARD TO THE CLAIM OF EXEMPTION U/S10(10C) OF THE ACT. THE ITAT HAS OBSERVED AS UNDER:- WE FIND THAT ITAT, MUMBAI BENCH IN A GROUP OF IDENTICAL MATTERS IN ITA NOS.6384/MUM/2006 AND OTHERS, IN THE CASE OF VAISHALI A. SHELAR AND OTHER S, VIDE ORDER DATED 28.03.2007 DISPOSED OF ALL THE APPEALS INVOLVING SIMILAR QUESTION OF LAW AND FACTS I.E. EXEMPTION AMOUNT RECEIVED ON OERS U/S.10(10C) IN FAVOUR OF THE ASSESSEE. THE VIEW OF MUMBAI BENCHES HAS BEEN FOLLOWED BY CHENNAI BENCH IN CONSOLIDATED ORDER IN ITA NO.471/MDS/06 AND OTHERS DATED 30/.04.2007 IN WHICH SIMILAR ISSUES ABOUT OERS BEING EXEMPT U/S.10(10C) HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE. IN THE CASE OF THE APPELLANT, THE FACTS ARE IDENTIC AL, I RESPECTFULLY FOLLOW THE DECISION OF HONBLE ITAT AHMEDABAD A BENCH AND GRANT THE RELIEF TO THE APPELLANT WITH A DIRECTION TO THE ASSESSING OFFICER TO ALLOW THE EXEMPTION U/S.10(10C) OF THE ACT FOR RS.5,00,000/-. ITA NO.4073/DEL./2011 6 SINCE THE LD. CIT(A) HAS GIVEN RELIEF TO THE ASSESS EE BY FOLLOWING DECISION OF ITAT AHMEDABAD BENCH A IN T HE CASE OF SMT. JAYA NARAYANAN AND OTHERS (SUPRA) IN ITA NO.1209/AHD/2007 WE FIND NO INFIRMITY IN THE ORDER PASSED BY LD. CIT(A) AND SAME IS HEREBY UPHELD. CONSIDERING ALL THESE DECISIONS OF ITAT RELIED UPON , WE ALLOW THE APPEAL OF THE ASSESSEE. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 29 TH DAY OF FEBRUARY, 2012. SD/- SD/- (I.P. BANSAL) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 29 TH DAY OF FEBRUARY, 2012 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A), MUZAFFARNAGAR. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.