1986 (5) TMI 81

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....eported for hearing. 3. The assessee was an employee of M/s Chic International Pvt. Ltd. Upto 30th June, 1981, when he resigned and took up job with another company namely M/s Indo Euro Chemical Ltd. At the time the left the service from the former employer, he received a sum of Rs. 11,000 towards encashment of his accumulated leave. ITO disallowed the assessee's claim for exemption of this amount under s. 10 (10AA) of the IT Act which action was confirmed by the AAC. Hence the present appeal. 4. Shri Vohra ld. Representative appearing for the appellant, contends the amount of Rs. 11,000 received by the assessee is clearly covered by exemption under s. 10 (10AA) and authorities below were not correct in rejecting his claim. Though s. ....

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....may take up another job after such resignation. It is further stated that after the amendment made by Taxation Law as (Amendment) Act, 1984, w.e.f. 1st April, 1978 by introducing the word "whether in s. 10 (10AA) (ii), qualifying the word retirement as "retirement whether on superannuation or otherwise" clearly pointed out that exemption will be available only in cases of normal retirement not in the cases of resignation. 6. We have considered the rival submissions of the parties. Sec. 10 (10AA) provided that any payment received by an employee in respect of so much of the period of earned leave at his credit at the time or retirement whether on superannuation or otherwise as does not exceed 6 months, calculated on the basis of the avera....

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....ification given in the memorandum explaining the Fiancee Bill, 1982 clearly brings out the intention of the Government to extend the exemption not only to the case of employees who have retired from one employer but also to those who have retired from successive employers in different years. It is provided that the total exemption that can be allowed in respect of such benefit received by such employee from different employers in different years should not exceed Rs. 30,000. thus it is clear that s. 10 (10AA) takes into its fold not only the cases of employees who have retired one for all from their employment but also cases of employees who retire from different employers indifferent years such a situation is possible only if the employee ....