https://www.taxtmi.com/caselaws?id=165082 A voluntary payment made on termination of employment was treated as capital compensation for loss of employment, not as revenue income or mere gratuity. The Bombay HC noted that the employee's service ended through a notice given under the contractual arrangement, and the surrounding circumstances showed the payment was made because the department was closed and the employment ended without fault on the employee's part. It held that the expression "compensation for loss of employment" in the Explanation to section 7 of the Income-tax Act, 1922, covers even a solatium paid without any enforceable legal liability, and the amount was therefore non-taxable as salary or gratuity. en-us Mon, 04 Feb 1957 00:00:00 +0530 Thu, 08 May 2014 16:36:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=165082 A voluntary payment made on termination of employment was treated as capital compensation for loss of employment, not as revenue income or mere gratuity. The Bombay HC noted that the employee's service ended through a notice given under the contractual arrangement, and the surrounding circumstances showed the payment was made because the department was closed and the employment ended without fault on the employee's part. It held that the expression "compensation for loss of employment" in the Explanation to section 7 of the Income-tax Act, 1922, covers even a solatium paid without any enforceable legal liability, and the amount was therefore non-taxable as salary or gratuity. Case-Laws Income Tax Mon, 04 Feb 1957 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=165082