TaxTMI 
TaxTMI 
2025 (5) TMI 2211
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....ditions. The Appellant pleads that as he has not been able to attend his Appeal for the reasons which were beyond his control, hence his Appeal is requested to restored back to the learned CIT (A) for adjudication on merits with reasonable opportunity. The Appellant requests your Honour to restore back the Appeal to the learned CIT (A) in the interest of Justice. 2. The Learned CIT (A) has erred in confirming the AO's ascertaining incorrect perspective of Form 10E, Form 16 & has thus erred in not granting relief u/s 89. 3. The learned CIT (A) has erred in confirming the AO's failure to make any enquiries related to non-reliability of Form 10E, employer not reporting relief u/s 89 in Form 16 & the same being taxable u/s 17(3)(i) & the understanding of advance salary, thus the AO has failed & erred in defying the established principle of natural justice, reasonable opportunity & has thus completed a biased & unlawful assessment. 4. The Learned CIT (A) has erred in confirming AO's non consideration and understanding of the Financial Scheme Document and failed to arrive at the correct interpretation and the underlying intentions of the Co. towards....
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....nbsp;10,20,208/- u/s 89(1) of the Act as it is an advance salary and not arrear salary. The Ld. AO sought explanation from the assessee in respect of the relief claimed u/s 89(1). The submissions of the assessee in response thereto, were considered but not found acceptable by the Ld. AO for the reasons recorded in para 4.2 of his order which are reproduced below:- "4.2 ....... The submission of the assessee is considered but not acceptable because the assessee has received an amount of voluntary retirement/compensation for full and final settlement. Further, as per Rule 21A of the Income tax Rules, 1962 relating to relief u/s. 89 is not permissible to the assessee as the nature of compensation received by the assessee is not in connection with the termination of the employment but the payment has been received on voluntary retirement in full and final settlement, the amount received by the assessee was properly assessable as salary income. As per the provisions of Section 17(3) (i) of the Income-tax Act it was profit in lieu of salary and hence it is assessable under the head "Salary". The same is reproduced as under: (3) "Profits in lieu of salary" includes- ....
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.... the employee of Pfizer Healthcare India Pvt. Ltd. and received payment from the company under the finance scheme for employees on account of loss of service. 6.2 The contention of the Ld. Counsel for the assessee in the instant case is that there was no obligation on the part of the company to pay any amount to its employees under the said scheme and the employees who opted for the said scheme availed the benefits of the scheme voluntarily and not under any compulsion. The payment received by the employee is on account of loss of income/service on account of closing of the plant of the company where the assessee was working, for the balance service left on his service records. It is, therefore, in the nature of capital receipt which is exempt from tax and not taxable under the provisions of 17(3)(i) of the Act as profit in lieu of salary as alleged by the Ld.AO. 7. The Ld. DR has not raised any objection and not brought contrary material on record to rebut the above submissions of the Ld. AR. 8. We have heard the Ld. Representatives of the parties and perused the material on record as well as paper book filed by the Ld. AR on behalf of the assessee. The facts of the case ....
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....as covered by the Financial Scheme 2019 of the company for employees at Aurangabad. We have perused the order of the Tribunal in the case of Ashok Raghunathrao Kulkarni (supra) wherein the Tribunal has set aside the order of Ld. CIT(A)/NFAC and directed the Ld. AO to delete the impugned addition. The relevant findings and observations of the Tribunal in the case of Ashok Raghunathrao Kulkarni (supra) is as under: "12. The Ld. Counsel for the assessee referred to the Financial Scheme for the employees at Aurangabad of Pfizer Healthcare India Pvt. Ltd., copy of which is placed at pages 73 to 83 of the paper book and drew the attention of the Bench to the following clauses: "I. PREAMBLE (i) Pfizer Healthcare India Private Limited (the "Company") has decided to cease manufacturing in its plant located at Plot No L8 (part), L-9 & Gut Nos 36, 37, 38, MIDC, Waluj, Aurangabad - 431136 ("Plant") with the intention to exit the Plant due to significant long term loss of product demand. (ii) The above decision is bona fide and has been made after an extensive and careful evaluation. The employees of the Plant have been informed of this decision and reasons t....
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....assessee or interest on such contributions or any sum received under a Keyman insurance policy including the sum allocated by way of bonus on such policy. Explanation.-For the purposes of this sub-clause, the expression "Keyman insurance policy" shall have the meaning assigned to it in clause (10D) of section 10; (iii) any amount due to or received, whether in 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." 15. So far as sub-clause (ii) is concerned, the Ld. Counsel for the assessee referring to the various decisions submitted that this clause is also not applicable. He submitted that the amount received by the assessee is not a compensation but on account of loss of pay. Referring to the decision of the Hon'ble High Court of Calcutta in the case of CIT vs. Ajit Kumar Bose (1987) 165 ITR 90 (Cal), he submitted that the Hon'ble High Court has held that where the conditions of service clearly stipulated that the assessee's services could be terminated at any time on giving three months notice and there was no obligati....
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....el for the assessee submitted that in case of the following employees where they have also received similar amounts from Pfizer Healthcare India Pvt. Ltd., the said amounts have not been added by the respective AOs in the reopening assessments treating the same as capital in nature. Sr. No. Particulars PAN Date of Order 1 Sharad D. Magar ASHPM1986C 28.3.2024 2 Dnyaneshwar Waghmare ABCPW4100G 26.3.2024 3 Ajay K. Agrawal AJJPA2079F 21.3.2024 4 Kalidas T Deshmukh AKTPD8174D 10.3.2024 5 Bhimraj S Kahandal ABRPK4860E 9.3.2024 6 Nandkishor Khairnar BFEPK6767A 9.3.2024 7 Narendrakumar P Desale BALPD6728C 4.3.2024 8 Ramesh S. Sonavne CEAPS7400G 21.2.2024 9 Sanjay N. Karale AAFPKO335H 16.2.2024 10 Ravindra W. Aherwal ABDPA1341G 13.2.2024 11 AG Deshmane AVLPD8364J 10.11.2023 21. He accordingly submitted that the CIT (A) / NFAC is not justified in sustaining the addition of Rs. 57,12,673/-. 22. The Ld. DR on the other hand heavily relied on the order of CIT (A) / NFAC. 23. We have heard the rival arguments made by both ....
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....employer at the time of cessation of his employment due to closure of the manufacturing unit was a capital receipt, not subject to tax. The assessee has also placed reliance on various case laws, in support of his above claim, and court has held as under "The amounts received were due to loss of employment & not recurring in nature & are not paid in lieu of any salary hence it does not come under the preview of sec. 17(3)(i) as amount of compensation. The said amounts have not been paid against any services of the assessee. Hence the same is not compensation as contemplated under the provisions of sec. 17(3)(i)." As the various courts have allowed the claim that the amount received at the time of cessation of his employment due to closure of the manufacturing unit as capital receipt during assessment proceedings in the cases referred by the assessee, the AO's has duly accepted the above claims of the respective assessee, which are very similar cases as that of the assessee's instant case. Hence, the reopened assessment proceedings in the case of the assessee, is hereby proposed to be completed by accepting the income returned by the assessee in response to 148." 25. In....
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....at the amount was a capital receipt or that it was payment of a casual and non-recurring nature was in the circumstances not necessary. We, hence, do not express any opinion on it. 7. The question of law referred to us in this case, namely : "Whether, on the facts and in the circumstances of the case, the amount of Rs. 24,933 received by the assessee could be treated as income under the charging section or under the section dealing with the computation of income of the assessee ?" 8. is answered in the negative, in favour of the assessee and against the Department." 27. We find the Delhi Bench of the Tribunal in the case of ITO vs. Avirook Sen (supra) at para 12 of the order has observed as under: "12. As the payment of ex-gratia compensation was voluntary in nature without there being any obligation on the part of employer to pay further amount to assessee in terms of any service rule. it would not amount to compensation in terms of section 17(3)(i) of the Act. The impugned addition was rightly deleted by the Ld. CIT(A). The aforesaid point is accordingly determined against the revenue department. The appeal is accordingly not sust....