2006 (10) TMI 265

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....ing did not press this ground of appeal, hence it is rejected. 2. The next grievance of assessee relates to taxability of Rs. 22 lakhs. 3. The brief facts of the case are that assessee has joined the services of M/s. Eagle Shipping Agencies (P.) Ltd. in 1975. On 1-5-1996 he has resigned from the company and at that time he was working as a District Sales Manager. His retirement benefits were granted to him. On 22-7-1996 the company had paid a sum of Rs. 22 lakhs, which has been treated by the assessee as ex gratia payment voluntarily paid by the employer without being any obligation to pay the same. Hence assessee claimed this amount as exempt from tax. The ld. Assessing Officer rejected the contention of the assessee and discussed th....

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....lump sum or otherwise, by any assessee from any person- (A)before his joining any employment with that person; or (B)after cessation of his employment with that person." While taking us through this provision the ld. counsel for the assessee emphasized that some of Rs. 22 lakhs received by the assessee is not a profit in lieu of salary as per the provisions of section 17(3)(i), because what the assessee received was ex gratia payment for his meritorious service on his resignation and not a compensation for loss of his service. He further contended that sub-clause (3) which cover such type of sum has been brought to statute by the Finance Act, 2001 with effect from assessment year 2002-03. Since the sub-clause (3) is not with retros....