2012 (11) TMI 1125 - AT - Income Tax

Summary

Issues involved: Denial of exemption u/s. 10(10C) of the Act in respect of Ex-gratia amount received by the assessee from employer under Exit Option Scheme.

Summary:
The Appellate Tribunal ITAT Pune considered the appeal challenging the denial of exemption u/s. 10(10C) of the Act in relation to the Ex-gratia amount received by the assessee under the Exit Option Scheme for the A.Y. 2008-09. The assessee, an employee of State Bank of India, opted for Voluntary Retirement under the Exit Option Scheme, leading to compensation payment by the employer. The assessee's claim for exemption u/s. 10(10C) was rejected by the Assessing Officer (A.O) and the CIT(A), prompting the appeal. The issue was found to be covered by the decision of the Hon'ble High Court of Bombay and supported by a CBDT Circular. Additionally, the ITAT Pune Bench had previously ruled in favor of similar assessees in comparable situations. The Tribunal allowed the appeal, directing the A.O to grant the exemption u/s. 10(10C) of the Act, in line with the High Court's decision and the Circular issued by the Board.

The decision was based on the precedent set by the Hon'ble High Court of Bombay and the CBDT Circular, along with the consistent rulings of the ITAT in similar cases. The Tribunal found no reason to interfere with the CIT(A)'s order and confirmed the allowance of the exemption u/s. 10(10C) for the assessee who opted for Voluntary Retirement under the Exit Option Scheme. The appeal was allowed, and the A.O was directed to provide the exemption as per the Act.