2026 (4) TMI 114 - AT - Income Tax

BSNL VRS compensation treated as retrenchment compensation and exempt under the Income-tax Act.

Compensation received under the BSNL voluntary retirement scheme was treated as retrenchment compensation and held exempt under section 10(10B) of the ... Retrenchment compensation received - eligibility of tax exemption u/s 10(10B) - amount received under Voluntary Retirement Scheme (VRS) HELD THAT: - The Tribunal noted that the controversy was identical to that decided by a co-ordinate bench in the case of Jayeshkumar Tulsidas Sutaria [2026 (2) TMI 930 - ITAT AHMEDABAD]. Finding no change either in the legal position or in the factual matrix, it followed the earlier decision and accepted the assessee's claim that the compensation received under the scheme was exempt, with the consequence that the grounds seeking relief under section 10(10B) were to be allowed. [Paras 6, 8] Final Conclusion: Following the earlier co-ordinate bench decision on the same BSNL scheme, the Tribunal held that the assessee's claim for exemption u/s 10(10B) was allowable. Assessee appeal allowed. Issues: Whether compensation received under the BSNL voluntary retirement scheme was exempt as retrenchment compensation under section 10(10B) of the Income-tax Act, 1961.Analysis: The Tribunal noted that the assessee had received compensation under the BSNL VRS and had claimed exemption in respect of the amount. It followed the coordinate bench decision on the same scheme and factual matrix, which had held such compensation to be exempt under section 10(10B). The Tribunal found no change in the legal position or in the facts warranting a different view.Conclusion: The compensation was held to be exempt under section 10(10B) of the Income-tax Act, 1961, and the assessee succeeded.