2000 (10) TMI 35

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....the instance of the Revenue, the following question has been referred by the Income-tax Appellate Tribunal, Delhi Bench D (in short "the Tribunal"), under section 256(41) of the Income-tax Act, (in short "the Act"), for the opinion of this court : "Whether, on the facts and in the circumstances of the case, the Tribunal is correct in holding that the provision for retrenchment compensation/grat....

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....anding dispute among the partners ... The management, therefore, regret to inform you that your services will no longer be required with effect from April 30, 1972. This letter which is being served upon you should be considered as one month notice of termination of your service. On the expiry of this notice, you will be paid all your outstanding dues including service compensation, etc. you ar....

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....d by the assessee did not create by themselves any responsibility to pay retrenchment compensation. The assessee could very well have withdrawn the notices before the due date of payment. (ii) Services of the employees were not terminated in the relevant previous year. They were terminated only in the subsequent year. The compensation became payable only at the time of termination of the servic....

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....nsation during the assessment year concerned. Notices of termination were issued on March 29, 1972, indicating to the employees about the intention to retrench them from employment. It was not disputed before the authorities that if the assessee decided to do so it could have withdrawn the notices. The notices issued did not create a responsibility to pay retrenchment compensation. In fact compens....