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2013 (2) TMI 72 - AT - Income TaxSalary terminology - definition of salary - whether Salary includes DA - computation of gratuity and leave encashment - Held that:- AO has rightly computed the amount of gratuity exempted under the Act by following definition of salary as per Fourth Schedule, Part A Rule 2(h) which defines salary including dearness allowance, if the terms of the employment so provides but exclude all other allowances and perquisites for the purpose of this Act. Disallowance of ₹ 29,060/- out of leave encashment under the provisions of section 10(10AA) - Held that:- In view of the Explanation to section 10(10), the computation of benefit of gratuity and leave encashment, as contemplated u/s 10(10) and 10(AA) are to be governed by the definition of 'salary' contained in the above Explanation and not by any agreement, as contended by the assessee viz 8th Bipartite Settlement on wage revision and other similar conditions between Indian Banks' Association and their Workmen. The definition of 'salary' is squarely and specifically applicable to section 10(10) and 10(AA) of the Act and, hence, any other definition of 'salary' cannot be imported and applied to such sections. This view is supported by the direct decision of the Hon'ble Madras High Court in the case of K. Gopal Krishan v. Central Board of Direct Taxes [1994] [1993 (4) TMI 33 - MADRAS HIGH COURT] - against assessee.
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