Admissibility of ex-gratia amount paid by assessees for gaining enduring benefit or advantage under Volun- tary Retirement Scheme (VRS)—regarding

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....hief Commissioners of Income-tax. All Directors-General of Income-tax. Subject : Admissibility of ex-gratia amount paid by assessees for gaining enduring benefit or advantage under Volun- tary Retirement Scheme (VRS)—regarding Sir, It is noticed that a number of assessees have resorted to restructuring of human resources, financial engineering, etc. Invariably, ex-gratia payments are made i....

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....s thus acquired or brought into existence, it would be immaterial whether the source of payment was the capital or the income of the concern or whether payment was made once and for all or was made in instalments. While it is not ordinarily easy to evolve a fool-proof test for ascertaining whether in a given case, expenditure is capital or revenue, the Assessing Officers normally decide the charac....