TMI Blog2023 (4) TMI 569X X X X Extracts X X X X X X X X Extracts X X X X ..... . Neither, the ld. A.O nor the NFAC conducted any independent inquiry regarding the veracity of this letter and none of the authorities have held this letter issued by the employer to the assessee as bogus. Without establishing the letter as non-genuine or without examining the sanctity of the payment made simply invoking the provisions of the Act for making addition is not appropriate for a quasi-judicial authority. Revenue should have verified and examined the genuineness of the letter which was produced by the assessee wherein the employer had stated that it is a voluntary payment made as per appreciation for the employee without entering into this exercise simply invoking the provision of the Act is not legally tenable and takes t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it does not consider the ratios laid down in the case laws of the Income Tax Appellate Tribunal, Mumbai and that of the Apex court against the doctrine of 'stare decisis The Appellant prays that the addition of Rs. 42,21,154/-be deleted. Ground No.2: On the facts and in the circumstances of the case and in law, the order of the learned Commissioner of Income Tax (Appeals) is perverse in as much as it violates the principles of natural justice by not providing any justification on case relied by appellant during the course of the hearing and hence the Appellant was given no opportunity to rebut or distinguish the same: The Appellant prays that the addition of Rs. 42,21,154/-be deleted. Ground No.3: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to drop the penalty proceedings. GENERAL: The Appellant craves leave to odd, to amend, to alter and/ or to delete all or any of the above grounds of appeal. 2. The brief facts in this case are that the assessee has taken voluntary retirement from Racold Thermo Private Limited Pune during the year under consideration. Thereafter the assessee has started trading business of Industrial consumable supply in the name of M/s. Laxmi Enterprises. The assessee received Rs. 47,21,154/- from the company as Ex-Gratia and from this amount claimed Rs. 5,00,000/- u/s 10(10C) VRS compensation/Termination of service and balance remaining amount of Rs. 42,21,154 from Ex-Gratia taken as capital receipt. 3. In this regard, the A.O obs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ought under profit in lieu of salary. 4. A show cause notice was issued in this regard to the assessee and the assessee submitted his reply which was considered by the A.O. It was observed and held as under: 2.4 The reply submitted by the assessee is duly considered and it is not acceptable as the claim of assessee that this amount was received in appreciation of long and loyal service rendered and that it was casual and non-recurring receipt and hence exempt under the Act. I disagree with the assessee's contention. The letter of the employer dated 16.02.2021, referred to above that ex gratia of Rs. 42,21,154/- was paid voluntarily and this payment was made by them out of their own sweet will as an appreciation to him for his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an appreciation of the employer the same letter would have been given at the time of voluntary retirement of the employee and no TDS would have been deducted on the said payment and also the payment would not have been included in form No. 16 given to the assessee by the employer. Further also, the letter was signed by Vice President (Human Resources) whereas Form No. 16 had been signed by the Asstt. General Manager of the company. Accordingly, the amount of Rs. 42,21,154/-was brought within the purview of taxation u/s 17(3)(iii) of the Income-tax Act, 1961 (hereinafter referred to as the Act ). 6. We have heard the rival submissions, considered relevant materials/documents on record, analysed the facts and circumstances in this case. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een paid in respect of the said amount and that further the letter which was produced by the assessee was signed by Vice President (Human Resources) only surfaced once the scrutiny started and notices u/s 143(2) and 143(1) were issued to the assessee. On the other hand, it is contended by the assessee that the payment has been made voluntarily by the employer out of his own sweet will and not bound by any or condition by any legal duty or legal obligations which are on sympathetic reason or otherwise. Further, neither the terms of employment nor the service rules of the employer company provides for making ex-gratia payment. Thus, the said amount is totally voluntary and it is not compensation. 7. Admittedly, the amount was received by t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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