2007 (2) TMI 289

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....come-tax Act, 1961, is admissible to the assessee on the voluntary retirement scheme amount in excess of the exemption under section 10(10C) of the Income-tax Act, 1961? 3. It is not in dispute that the assessee, who was an employee of UCO Bank ("the employer"), took the voluntary retirement in the financial year 2001-02 under the Voluntary Retirement Scheme, 2001 (for short "VRS") and received an amount of Rs. 11,40,881 from the employer at the time of voluntary retirement. The assessee in his return filed for the assessment year 2002-03 included the amount received on voluntary retirement in his taxable income from salary and after claiming an exemption of Rs. 5 lakhs in terms of section 10(10C) of the Income-tax Act, 1961 ('the said A....

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....sion of section 10(10C) of the Income-tax Act was not in existence at the time when the said judgment was delivered. 5. That the amount received by the assessee on voluntary retirement is covered by section 17(3)(i) of the Income-tax Act cannot be doubted. "Profits in lieu of salary" includes the amount of any compensation received by an assessee from his employer in connection with the termination of his employment. Cessation of employment because of voluntary retirement is also the termination of employment and the amount of the compensation received by the assessee from the employer in connection thereto is covered by "profits in lieu of salary". 6. Before the Income-tax Appellate Tribunal the whole emphasis of the Revenue was foun....

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....on 17, we see no impediment in the assessee getting benefit of section 89 of the Income-tax Act irrespective of the amount up to Rs. 5 lakhs being exempt under section 10(10C). The relief under section 89 of the Income-tax Act is entirely different and cannot be denied merely because an amount up to Rs. 5 lakhs received on voluntary retirement is exempted under section 10(10C). Section 89 of the Income-tax Act operates in a different field and the relief given to an assessee under section 89 is for different purpose and cannot be mixed up with the exemption given under section 10(10C). Clause (viii) of section 10(10C) which provides that no exemption there under shall be allowed in relation to any other assessment year has nothing to do wit....