https://www.taxtmi.com/css/info/rss_sitemap/rss_feed.css?v=1746094055 https://www.taxtmi.com Business/Tax/Law/GST/India/Taxation/Policies/Legal/Corporate Tax/Personal Tax/Vat Law/Legal Information/Tax Information/Legal Services/Tax Services Tax Management India. Com / MS Knowledge Processing Pvt. Ltd. All rights reserved. One stop solution for Direct Taxes and Indirect Taxes https://www.taxtmi.com/caselaws?id=762310 https://www.taxtmi.com/caselaws?id=762310 Eligibility of exemption u/s 10(10) and 10(10AA) - Eligibility for full exemption - assessee being an employee of Maharashtra State Electricity Transmission Co. Ltd. which is a Public Sector Undertaking (PSU) - disallowance of excess exemption claimed by the assessee for retirement gratuity and leave encashment respectively - HELD THAT:- Perusal of the chart submitted by the Ld. AR reveals that the assessee joined Maharashtra State Electricity Board on 02.07.1981 and he retired on 30.11.2018 from Maharashtra State Electricity Transmission Co. Ltd. Out of his total service tenure of about 37 years, his tenure with Maharashtra State Electricity Board was about 24 years and with Maharashtra State Electricity Transmission Co. Ltd. was about 13 years. Accordingly, the assessee is entitled to claim exemption for retirement gratuity and leave encashment received by him at the time of superannuation on the proportionate/prorata basis based on his employment tenure with the State Government i.e. Maharashtra State Electricity Board and his employment tenure with PSU i.e. Maharashtra State Electricity Transmission Co. Ltd. - assessee has contended before us that the balance amount of retirement gratuity of Rs. 11,49,579/- is also eligible for full exemption as it is fully covered within the limit laid down as per section 4(3) of the Payment of Gratuity Act, 1972 (as amended) - With respect to the claim of exemption for leave encashment amounting to Rs. 23,99,740/- full exemption shall be available in respect of the proportionate amount of Rs. 15,33,910/- and for the balance of Rs. 8,65,830/- the assessee shall be entitled to claim exemption to the extent of Rs. 3,00,000/- only and the remaining amount of Rs. 5,65,830/- shall be taxable. This view finds support by the decision of Adinath Wandhekar [ 2024 (4) TMI 666 - ITAT PUNE] . However, the present facts need verification. Accordingly, we set aside this issue to the file of Ld. AO for verification of the details/calculation submitted by the assessee and allow the claim of exemption for retirement gratuity and leave encashment received by the assessee at the time of his superannuation on proportionate basis, as per law keeping in view his employment tenure with Maharashtra State Electricity Board and Maharashtra State Electricity Transmission Co. Ltd. The assessee shall co-operate fully before the Ld. AO and provide requisite details/explanation as may be required/called for in support of his claim. Unexplained investments made in mutual funds u/s 69 - CIT(A) restricted the said addition for the same reason in spite of the bank statement furnished by the assessee showing the deposits and investments made during the relevant period - AR therefore urged that given an opportunity the assessee is in a position to explain the source of investments in mutual funds by filing supporting documentary evidence before the Ld. AO - HELD THAT:- As we deem it fit to restore this issue back to the file of Ld. AO to verify the claim of the assessee and if found correct delete the addition sustained by the Ld. CIT(A) by suitable modifying the assessment order. We order accordingly. Case-Laws Income Tax Thu, 10 Oct 2024 00:00:00 +0530