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2018 (5) TMI 1573 - ITAT DELHIDisallowance of Voluntary Retirement Scheme (“VRS”) retrenchment compensation - claim under section 35DDA denied - allowable busniss expenses - closure of unit - Held that:- In order to save future losses, Aurangabad unit was closed down by the assessee-company. The closure is approved by the Board of Directors and there was an Agreement executed between the Worker’s Union and the Assessee-Company for retrenchment of its employees on account of closure of the Aurangabad factory. These facts have not been rebutted by the Revenue. Amount in question have been paid by assessee-company on account of retrenchment compensation on closure of the Aurangabad unit of the assessee-company. The amount is thus paid for business purposes only and as such, it was an allowable deduction under section 37 of the I.T. Act. Provisions of Section 35DDA applied by the A.O. are not applicable in this case because assessee-company has not paid any service compensation under any scheme of voluntary retirement. In the absence of any contrary material brought on record, we are of the view that no interference is called for in the matter. - Decided against revenue.
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