THE MANDI URBAN CO-OP. BANK LTD.,MANDI V. ACIT, CIRCLE, MANDI

ITA 1613/CHANDI/2019

AI Insights

The case involves Shri Bijender Singh Dhankhar, who appealed against the decision of the Commissioner of Income Tax (Appeals) regarding the taxability of a Voluntary Retirement Scheme (VRS) compensation received from HMT Ltd. The compensation was initially partially offered to tax, with a claim for relief under section 89(1) for a portion of it. However, during the appeal, the assessee claimed the entire amount received was exempt under section 10(10B) due to it being compensation on the closure of an undertaking, despite being styled as VRS. The Tribunal, referencing a similar case and decisions from the High Court of Madras, ruled in favor of the assessee, exempting the entire amount from tax under section 10(10B).

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 707147 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 year(s) 6 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 30-12-2019
• Other Referred Cases: Shri Suresh Pal Chauhan vs. ITO, Hindustan Photo Film Workers vs. WP No.18566 of 2015
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RANJIT KAUR LD.
• Assessee Lawyers: NEELAM DHIMAN LD

Judgement Text

"1 IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, CHANDIGARH PHYSICAL HEARING BEFORE HON’BLE SHRI RAJPAL YADAV, VICE PRESIDENT AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकरअपीलसं./ ITA No.222/CHANDI/2025 (िनधाŊरणवषŊ / Assessment Year: 2017-18) Shri Bijender Singh Dhankhar 2078, Green Valley Ghatiwala Pinjore-134102 बनाम/ Vs. ITO Ward No-1 Panchkula.134109 ̾थायीलेखासं./जीआइआरसं./PAN/GIR No. AARPD-8813-H (अपीलाथŎ/Appellant) : (ŮȑथŎ / Respondent) अपीलाथŎकीओरसे/ Appellant by : Smt. Neelam Dhiman (CA) – Ld. AR ŮȑथŎकीओरसे/Respondent by : Dr Ranjit Kaur (Addl. CIT) – Ld. Sr. DR सुनवाईकीतारीख/Date of Hearing : 08-07-2025 घोषणाकीतारीख /Date of Pronouncement : 10-07-2025 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2017-18 arises out of an order of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 31-03-2022 in the matter of an intimation issued by CPC u/s 143(1) of the Act on 20-11-2017. Having heard rival submissions and upon perusal of case records, the appeal is disposed-off as under. The 2 sole issue that fall for our consideration is assessee’s claim of deduction u/s 10(10B). 2. From case records, it emerges that the assessee received VRS amount from HMT Ltd. The receipt was claimed to be compensation on termination of employment since it was stated to be received on closure of Tractor division of HMT Ltd. The assessee had initially offered the compensation to tax and claimed relief u/s 89(1) but during first appeal, the full amount was claimed to be exempt u/s 10(10B). However, Ld. CIT(A) did not agree with assessee’s claim for want of sufficient explanations / submissions from the assessee. Aggrieved, the assessee is in further appeal before us. 3. It emerges that the assessee received compensation of Rs.27,67,681/- out of which amount of Rs.5 Lacs was claimed exempt and remaining amount of Rs.22,67,681/- was offered to tax. The assessee claimed relief u/s 89(1) for Rs.2,67,501/-. The claim of the assessee is that remaining amount of Rs.22,67,681/- is also exempt from tax since it is nothing but compensation received on closure of undertaking though the compensation was styled as VRS. We find that this issue is covered in assessee’s favor by the decision of this Tribunal in bunch of appeals titled as Shri Suresh Pal Chauhan vs. ITO (ITA Nos.83/Chd/2023 & ors. dated 20-09-2023) wherein the bench considering the decision of Hon’ble High Court of Madras in the case of Hindustan Photo Film Workers (WP No.18566 of 2015 dated 17-03- 2017) as well as various other decisions, held that whole amount received form HMT Ltd. would be exempt u/s 10(10B). Facts being 3 pari-materia the same, we would hold that the remaining compensation of Rs.22,67,681/- would also be exempt u/s 10(10B). The relief u/s 89(1) as claimed by the assessee would stand revised accordingly. The Ld. AO is directed to re-compute the income of the assessee and revise the demand in terms of our order. 4. The appeal stand allowed. Order pronounced on 10-07-2025. Sd/- Sd/- (RAJPAL YADAV) (MANOJ KUMAR AGGARWAL) VICE PRESIDENT ACCOUNTANT MEMBER Dated: 10-07-2025. आदेश की Ůितिलिप अŤेिषत /Copy of the Order forwarded to : 1. अपीलाथŎ/Appellant 2. ŮȑथŎ/Respondent 3. आयकरआयुƅ/CIT 4. िवभागीयŮितिनिध/DR 5. गाडŊफाईल/GF ASSISTANT REGISTRAR ITAT CHANDIGARH "