TaxTMI 
TaxTMI 
2012 (12) TMI 289
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.... CIT erred in holding that the assessment order is erroneous and prejudicial to the interests of the revenue as most of the other issues (discussed in the revisional order) were also held in favour of the appellant by various judicial precedents, notwithstanding and without prejudice to the above. 2. Payments made to the employees under the Exit Option Scheme - Rs. 7,09,56,323/- (a) The learned CIT erred in directing the Assessing Officer to disallow the payments made by the Bank to its employees under the Exit Option Scheme by treating the same as capital expenditure. (b) The learned CIT ought to have appreciated that the said expenditure was incurred purely on employee welfare measure and thus is eligible for deduction as revenue expenditure under the Act. (c) Notwithstanding and without prejudice to our above contention, the learned CIT ought to have appreciated that any expenditure incurred by way of payments to employees in accordance with any scheme of voluntary retirement is eligible for deduction under section 35DDA of the Act and accordingly, the appellant shall be eligible for 1/5th of the total expenditure as deduction in assessm....
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....es under column 4, it has been mentioned that computers includes printers, modem & other accessories. But as per provisions of the Income-tax Act in order to claim depreciation @ 60% in respect of computers the meaning of computer is "computers including computer software", further computer software means "any computer programme recorded on any disc, tape, perforated media or other information storage device". In the present case the break up is not available in respect of computers. Hence the excess depreciation claim has to be reworked and has to be disallowed in respect of printers, modem and other accessories. (e) In the 3CD report, the CA has qualified that a sum of Rs. 1,15,566/- has been paid as penalty. But the same has not been added back in the computation. This has resulted in under assessment to a tune of Rs. 1,15,566/- having tax effect of Rs.38,899. 4. The assessee objected to the proposed revision order under section 263 of the Act vide letter dated 26/11/2010. The objection of the assessee with regard to proposed disallowance of Rs. 7,09,56,323/- reads as follows:- "In this connection, it is submitted that as per the provisions of section 35DDA of the....
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....rs in JMGS-I and above to whom the State Bank of Mysore officers services regulation 1979 are applicable who feel frustrated and de-motivated due to lack of career prospects. It also applies to officers who had crossed 58 years between 30.2.06 to 10.7.2006. The perusal of the scheme shows that it has resulted in enduring benefit to the assessee by permitting frustrated and de-motivated officers to exit the bank. In other words such expenditure is capital in nature and cannot be allowed under any provisions of the Income-tax Act due to the restrictions placed by sec.36DDA as well as by the nature of such expenditure. The Assessing Officer is directed to withdraw the deduction of Rs. 7,09,56,323.43/- being VRS expenditure debited to the profit and loss account". 6. The assessee being aggrieved is in appeal before us. 7. The learned AR submitted that a plain reading of provisions of section 35DDA of the Act, it is clear that compliance with the conditions of Rule 2BA is mandatory only to avail exemption under section 10(10C) of the Act by the employees and thus the said rule is not relevant to claim of deduction under section 35DDA of the Act. Further, the learned AR submitted t....
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....ous years". "Any amount received (or receivable by an employee of - (a) a public company; or (b) any other company; or (c) an authority established under...; (d) ............. (e) ............ (f) ........... (g) ............ Provided that schemes of the said companies or authorities (or societies or Universities or the Institutes referred to in sub-clauses (f) and (g), as the case may be, governing the payment of such amount are framed in accordance with such guidelines (including inter alia criteria of economic viability) as may be prescribed; ...................." 9.1 It is clear from the proviso to section 10(10C) that in order to claim an exemption under this section in respect of any payments received/receivable by an employee under any voluntary retirement scheme/schemes, such scheme/schemes must comply with the guidelines prescribed in this regard i.e. guidelines prescribed under Rule 2BA. In other words, the employee is entitled to exemption under section 10(10C) of the Act only if the voluntary retirement scheme fully complies with the conditions as prescribed in Rule 2BA. There are no such provisions in section 35DDA of the Act similar to....