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2010 (7) TMI 796 - AT - Income TaxVoluntary retirement payments - claim u/s 10(10C) - The facts of the case are that assessee is a Deputy Manager in SBI and has taken VRS under exit option scheme introduced by the Bank of India. The assessee received salary and pension (including ex gratia). On examination of Form No. 16 the AO noticed that assessee received ex gratia of Rs. 3,07,236 on VRS. He claimed exemption u/s10(10C). The AO disallowed the claim by following Circular No. Chief CIT, Baroda letter BRD/Chief CIT/Tech/MICS/10(10C)/2009-10. HELD THAT:- In the case of SAIL DSP VR Employees Association 1998 v. UOI [2003 (2) TMI 46 - CALCUTTA HIGH COURT] held as under Sums paid on voluntary retirement to the extent of rupees five lakhs are exempted from being charged to tax by reason of section 10(10C). Even if the payment is stretched over a period of years, the same would not become chargeable to tax in any subsequent assessment year. They have also held that provision of section 10(10C) should be interpreted in a manner beneficial to the optee for voluntary retirement. Similarly, In the case of CIT v. P. Surendra Prabhu[2005 (9) TMI 67 - KARNATAKA HIGH COURT] held that the assessee, employee of the respondent bank was not only entitled to the benefit of exemption u/s 10(10C) to the extent prescribed in the provision itself but for any amount over and above the prescribed limit; under the aforesaid provision, the assessee was also entitled to relief u/s 89(1) r/w rule 21A. Respectfully following the above decision of the Tribunal, we allow the claim of assessee. In the result, appeal of the assessee is allowed.
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