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2009 (12) TMI 103 - HC - Income TaxExemption under Section 10(10C) of the Income Tax Act, 1961 in respect of the amount received under the Early Retirement Option of the ICICI Bank - The assessee is an individual and was employed in ICICI Bank. He took voluntary retirement under the Early Retirement Option (hereinafter referred to as the ERO) floated by the ICICI Bank. The ERO cash compensation of Rs.16,96,780/- was received by the assessee. For the assessment year 2004-2005, the assessee filed his return of income on 16.6.2004 declaring a total income of Rs.2,27,710/- and claimed a refund of Rs.2,60,470/-. The assessee claimed exemption under Section 10(10C) of the Act to the extent of Rs.5 lakhs out of the compensation received under the said scheme. Subsequently, the assessee filed a revised return on 22.12.2004 admitting an income of Rs.11,96,780/-, which was processed under Section 143(1) of the Act and a refund of Rs.1,90,755/- was granted. Later on, the case was taken up for scrutiny by issuance of a notice under Section 143(2) of the Act and in the assessment under Section 143(3) of the Act, the Assessing Officer took the view that the ERO scheme of the ICICI Bank did not fulfill the conditions enumerated in Sub.Clauses (iii) and (iv) of Rule 2BA of the Income Tax Rules (hereinafter referred to as the Rules) and that the exemption under Section 10(10C) of the Act cannot at all be allowed. The scrutiny assessment was completed on 26.12.2006 denying exemption of Rs.5 lakhs under Section 10(10C) of the Act and the total income was determined at Rs.16,96,780/-. – CIT(A) decided in favor of assessee – ITAT decided against the assessee - Held that – the scheme is not entitled for exemption – but since the tax effect is less than Rs. 2 lakhs, the appeal is decided in favour of assessee and against the revenue
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