Tribunal grants deduction for ex-gratia payments but dismisses claim for leave travel concession.

The Tribunal partially allowed the appeal, granting the deduction under section 10(10C) of the Income Tax Act for ex-gratia payments received under the VRS Scheme of State Bank of India. However, the claim for deduction under section 10(5) of the Act for leave travel concession was dismissed due to overseas travel being included, restricting the taxable amount to Rs. 1,19,227.

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Issues Involved:
1. Appeal against order of Commissioner of Income Tax (Appeals)
2. Claim of deduction under section 10(10C) of the Income Tax Act
3. Claim of deduction under section 10(5) of the Income Tax Act

Issue 1: Appeal against order of Commissioner of Income Tax (Appeals):
The appeal was filed by the assessee against the order of the Commissioner of Income Tax (Appeals), Chandigarh dated 20.07.2011, concerning the order passed under section 143(3) of the Income Tax Act, 1961. The general ground raised by the assessee was dismissed.

Issue 2: Claim of deduction under section 10(10C) of the Income Tax Act:
The assessee claimed a deduction under section 10(10C) for ex-gratia payments received under the VRS Scheme of State Bank of India. The claim was rejected by the Assessing Officer and the CIT (Appeals). However, the Tribunal directed the Assessing Officer to allow the deduction based on a precedent set in a similar case, thereby allowing the claim.

Issue 3: Claim of deduction under section 10(5) of the Income Tax Act:
The dispute arose regarding the claim of deduction under section 10(5) of the Act for leave travel concession (LTC) amounting to Rs. 1,19,227. The Assessing Officer disallowed the claim as the tour included overseas travel. The CIT (Appeals) upheld this decision, citing that the exemption is not allowable for travel outside India as per the Act and relevant rules. The Tribunal concurred, emphasizing that the exemption is only applicable for travel within India as per the Act and Rule 2B of the Income Tax Rules. The claim for exemption under section 10(5) was thus dismissed, restricting the taxable amount to Rs. 1,19,227.

In conclusion, the Tribunal partially allowed the appeal, granting the deduction under section 10(10C) but dismissing the claim for deduction under section 10(5) of the Income Tax Act.

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