TaxTMI 
TaxTMI 
2015 (6) TMI 29
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....he present appeals. 2. It has been explained that along with the present three assessees, the identical case of another assessee namely Mr. Pradeep Pandhare was also decided by the AO. The above said persons were employees with Colgate Palmolive India Ltd. And they took voluntarily retirement. They claimed exemption under section (10)(10C) of the Income Tax Act to the extent of Rs. 5 lakhs which was allowed and refund was issued. However, the cases were reopened by the Assessing Officer (hereinafter referred to as the AO) and the claim of the assessees was denied and impugned demand was raised. 3. The assessees preferred appeals before the Commissioner of Income Tax (Appeals) [(hereinafter referred to as the CIT(A)] which were dismiss....
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.... that the decision in the case of one of them will be applied in the cases of all, hence, could not prefer the appeals in time. Considering the reasoning given by the assessees, we condone the delay in preferring the present appeals. 6. The dispute is relating to the entitlement of exemption to the assessees under section (10)(10C) of the Act. The Ld. A.R. of the assessee, at the outset, has stated that the issue under consideration based on identical facts has been raised by one of the colleagues of the assessees namely Mr. Pradeep Pandhare. The matter was considered by the Tribunal in his appeal bearing ITA No.6055/M/2013 for the A.Y. 2007-08 decided on 18.07.14 and the claim has been allowed in favour of the assessee by the Tribunal b....
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....ns under sub rule (vi)has been that the amount received under VRS should not exceed amount equivalent to three months salary for each completed years of service or salary at time of retirement multiplied with balance number of months of service left. The tenure of the assessee with the Company was for 21.7 years and his age at time of retirement was 46.95 years and number of years left for retirement was 13 years. His eligible salary at time of retirement was Rs. 12,741 per month. Accordingly, amount specified under Rule 2BA was calculated as follows: -Three months salary for each completed year of service comes to Rs. 8,30,605 (Rs. 12,741x21.7x3) -Salary for the balance months of service was Rs. 19,94,623 (Rs. 12.741 x 12x 13) How....
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....t permissible under Section 10(10C) of the Income Tax Act 1961 read with Rule 2BA of the Income Tax Rules, 1962 up to an amount of Rs. 5,00,000/-(Rupees Five Lakhs only). The tax benefit referred to above would be available only to an assessee who has completed 10 years of service in the Company or 40 years of age and has not availed of benefit of similar Voluntary Retirement Scheme in the past. It has been a condition of the Scheme that the vacancy caused by voluntary retirement would not be filled up nor would the retiring Associate be employed in another unit or concern belonging to the Company. The ld. AR has further submitted that a reading of the clauses of the scheme reveals that the Scheme framed was in accordance with the provision....
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....The Hon'ble Kolkata High Court in the case of "Sale DSPVR Employees of the Association" (supra) has held that section 10(10c) was inserted in order to make voluntary retirement attractive so as to reduce human compliments for securing economic viability of certain companies. This has to be interpreted in a manner beneficial to the opted for retirement, even if there is any ambiguity. 7. We may observe that the section 10(10C) starts with the words "any amount received or receivable by an employee" whereas the rule 2BA clause 6 has prescribed as limit of such amount. It has been provided in first proviso to section 10(10C) that the schemes under this section are to be framed by the various institutes/companies in accordance with such guid....
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....e differs at one or two points from the guidelines is not sufficient to deny the benefits granted under the section 10(10C) to an employee in view of the beneficial nature of the provision keeping in view the purpose and object sought to be achieved through such a provision. We, therefore, are of the view that denial of exemption to the assessee only because he has received compensation on his retirement a little more than the limit prescribed by rule 2BA, will be against the spirit of the provisions of the section 10(10C), especially, when no such limit has been prescribed under section 10(10C) and also in view of our observations that provisions of rule 2BA are not mandatory but in the shape of guidelines which are to be taken into consid....