TaxTMI 
TaxTMI 
1986 (7) TMI 141
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.... B.P. (Indian Agencies) Ltd. He retired after about 29 years of service with effect from 10-4-1977, which falls during the previous year relevant to the assessment year 1978-79 under consideration in the present appeal. On retirement, he was entitled to a total pension of Rs. 12,672 per annum. He, however, opted for the service benefit, which, we are given to understand, was three years' salary, which amounted to Rs. 77,760 in lieu of surrender of 5.4 per cent thereof from the pension. The pension was, thus, reduced by 5.4 per cent of Rs. 77,760, i.e., Rs. 4,199 and the reduced pension was only Rs. 8,473 as against Rs. 12,672 earlier. In the salary certificate, which was given by the employer the amount of service benefit of Rs. 77,760 was ....
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....d to exemption as laid down under section 10(10A)(ii) and this exemption was wrongly allowed by the AAC on the service benefit of Rs. 77,760. 4. On the other hand, the assessee's learned counsel, Shri Dastur, submitted to us that section 10(10A)(ii) in the case of payment in commutation of pension from any other employer does not talk of the determination of the commuted value having regard to the age of the recipient, the state of his health, the rate of interest and officially recognised tables of mortality as a condition for exemption but talks of them only for determining the limit up to which the exemption has to be allowed. Proceeding further he submitted that the employer, i.e., the British Petroleum Co. Ltd. has certified that unde....
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....tter was looked into the assessee's claim of exemption on the amount of service benefit of Rs. 77,760 received in lieu of commutation of pension to the extent of Rs. 4,199, i.e., less than one-third was admissible and was rightly allowed by the AAC. 7. The learned departmental representative, Shri Subramanian, in reply referred to the definition of 'profits in lieu of salary' inserted by sub-section (3) of section 17 of the Act, where any payment from an employer or former employer received or due to be received not being assessee's contribution to an approved provident fund or superannuation fund or interest thereon or amounts exempt under section 10 are included in 'profits in lieu of salary' and consequently in 'salary' as defined under....
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....d be necessary to refer to sub-clause (ii) of clause (10A) of section 10, which reads as follows : "(ii) any payment in commutation of pension received under any scheme of any other employer, to the extent it does not exceed--- (a) in a case where the employee receives any gratuity, the commuted value of one-third of the pension which he is normally entitled to receive, and (b) in any other case, the commuted value of one-half of such pension, such commuted value being determined having regard to the age of the recipient, the state of his health, the rate of interest and officially recognised tables of mortality: Provided that the maximum limit of payment specified in sub-clause (ii)(a) or sub-clause (ii)(b) shall not apply in respect o....
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....ealth, the rate of interest and the officially recognised tables of mortality. A certificate was filed before us from the employer that in arriving at the amount of the service benefit the employer company acting on the advice of the Scheme's Actuary had given due consideration to the average age on retirement, the net rate of interest after allowing for the possibility of discretionary pension increases and the expected mortality of the pensioner. This certificate, however, is undated and there is no material before us to show that this certificate was filed before the ITO. Besides, the claim of exemption of the service benefit on the basis that it was payment in commutation of pension was not made before the ITO but was made for the first....