Income tax appeal tribunal upholds deletion of salary addition; refund not voluntary.

The Tribunal affirmed the CIT(A)'s decision to delete the addition towards income from salary, emphasizing that the refund of excess salary was not voluntary but to comply with legal requirements. The Tribunal found no infirmity in the CIT(A)'s decision and dismissed the appeal of the Revenue.

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Issues Involved:
- Addition towards income from salary deleted by CIT(A)
- Taxability of salary under section 15(b)
- Taxability of perquisite value of interest

Issue 1: Addition towards income from salary deleted by CIT(A)

The assessee's appeal for A.Y. 2014-15 challenged the order of CIT(A)-2, Vadodara, deleting the addition towards income from salary. The Revenue contended that the salary, whether due or not, and whether received or not, is chargeable to income tax. The Assessing Officer added an amount to the total income of the assessee based on the total salary originally received. However, the CIT(A) allowed the appeal, emphasizing that the refund of excess salary was not voluntary but to comply with legal requirements. The CIT(A) relied on a decision of the Hon'ble Delhi High Court to support this conclusion. The Tribunal dismissed the appeal of the Revenue, affirming the CIT(A)'s decision.

Issue 2: Taxability of salary under section 15(b)

The Revenue argued that the amount in question should be taxable under section 15(b) even if considered as 'not due.' However, the CIT(A) analyzed the facts, highlighting that the entitlement to remuneration is governed by the Companies law and approved by the Central Government. The CIT(A) noted that the remuneration exceeding the approved amount was not due to the appellant. The CIT(A) further emphasized that the refund of salary was made to comply with the provisions of the Companies Act, 1956, and was not voluntary. Citing a relevant decision, the CIT(A) held that only the net amount of salary after deducting the refund amount is taxable. Consequently, the addition made by the Assessing Officer was directed to be deleted.

Issue 3: Taxability of perquisite value of interest

The Revenue contended that the perquisite value of interest should be taxable as the assessee did not state that any interest was charged by the employer. However, the CIT(A) considered the facts and the legal requirements under the Companies Act, 1956. The CIT(A) concluded that the refund of the excess salary was not voluntary but to comply with legal provisions. Relying on a decision of the Hon'ble Delhi High Court, the CIT(A) held that the refund was made to adhere to the law, and therefore, the excess amount should not be considered as income assessable to tax. The Tribunal upheld the CIT(A)'s decision, dismissing the appeal of the Revenue.

In conclusion, the Tribunal affirmed the CIT(A)'s decision to delete the addition towards income from salary, emphasizing that the refund of excess salary was not voluntary but to comply with legal requirements. The Tribunal found no infirmity in the CIT(A)'s decision and dismissed the appeal of the Revenue.

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