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2016 (9) TMI 1148 - AT - Income TaxRevision u/s 263 - Voluntary retirement compensation - disallowance of claim of deduction allowed under sec. 10(10C) - “profit in lieu of salary” - Held that:- As decided in CIT vs. Sharda Sinha [2015 (12) TMI 1290 - DELHI HIGH COURT] wherein held that the sum paid to the assessee was “to compensate for the abrupt loss of source of income” and that the termination of contract had fatally injured the appellant’s only source of income for the last 20 years. The mere fact that the assessee was free to earn through other sources would not make a difference to this position. The question was thus answered in affirmative that in favour of the assessee and against the Revenue. A possible view to treat the compensation of ₹ 5 lacs received by the assessee from its employer was not liable to tax under sec. 17(3) of the Income-tax Act, 1961 was certainly there. Hence, it cannot be said that the assessment order allowing exemption on the said receipt of ₹ 5 lacs was erroneous and thus prejudicial to the interest of Revenue as well. We thus while setting aside order in question passed under sec. 263 of the Act restore the assessment order granting the above relief on the receipt of ₹ 5 lacs as compensation. The grounds involving the issue of validity of revisional order passed under section 263 of the Act are accordingly allowed in favour of assessee
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