TMI Blog2016 (6) TMI 687X X X X Extracts X X X X X X X X Extracts X X X X ..... Overturning the impugned order on this score, allow exemption u/s 10(10)(i) to the arrears of gratuity received by the assessee at ₹ 6,50,000/- during the instant year. Arrears of leave encashment - denial of benefit - Held that:- As there is not much difference in the language of section 10(10)(i) and 10(10AA)(i) and the view taken in respect of arrears of gratuity u/s 10(10) should be followed for arrears of leave encashment u/s 10(10AA). The ld. DR supported this proposition. As both the sides are consensus ad idem on the position that the view taken in the context of section 10(10) as applicable to leave gratuity be followed here in the context of section 10(10AA) in the context of leave encashment, thus desisting from independ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. He observed that gratuity and leave encashment were exempt up to the limit of ₹ 3,50,000/- and ₹ 3 lac, respectively, in the case of the assessee, which limit stood exhausted in the earlier year at the time of their receipt. He further noticed that exemption limit was enhanced to ₹ 10 lac for the persons retiring from service on or after 24.5.2010. Since the assessee retired before this cut-off date, the AO opined that the extended benefit of exemption was not available to the assessee. He jettisoned the claim of the assessee for exemption u/s 10(10) of the Act and held that the correct sections applicable were 10(10)(iii) and section 10(10AA)(ii). Since the assessee was an employee of CCSU, the AO held that such employ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s 10(10)(i) of the Act. On the contrary, the Revenue has treated it as a case falling u/s 10(10)(iii). In order to appreciate the rival contentions in right perspective, it will be apposite to set out the relevant parts of section 10, as under :- `(10) (i) any death-cum-retirement gratuity received under the revised Pension Rules of the Central Government or, as the case may be, the Central Civil Services (Pension) Rules, 1972, or under any similar scheme applicable to the members of the civil services of the Union or holders of posts connected with defence or of civil posts under the Union (such members or holders being persons not governed by the said Rules) or to the members of the all-India services or to the members of the civil s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l of the above provision indicates that if a case falls under clause (i) of section 10(10), the entire amount of death-cumretirement gratuity becomes exempt. Au contraire, if a case falls under sub-clause (iii) of section 10(10), then, the exemption is limited to the amount as the Central Government may notify in official gazette. It is an accepted position that the Notification u/s 10(10)(iii) issued on 24.5.2010 raised the ceiling of exemption from ₹ 3,50,000/- to ₹ 10 lac. Since the original amount was received by the assessee during the currency of an earlier year on his retirement, the exemption limit prevalent at that time at ₹ 3,50,000/- was used by the assessee. It is nobody s case that the extended limit of exempt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n record by the ld. DR to show that the assessee was holding a post other than civil post. 7. The second requirement is that such civil post must be under a State. Page 20 of the paper book is a copy of Haryana and Punjab Agricultural University Act, 1970, which was passed by the Parliament and received the assent of the President on 2nd April, 1970. Under this Act of Parliament, two independent agricultural universities in place of the hitherto Punjab Agricultural University, were established. Section 5 of this Act sets out the name of CCSU as the agricultural university to function within the territories of State of Haryana. This proves that the CCSU was established by an Act of Parliament. Page 29 of the paper book is a document which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e (i) of section 10(10), the same cannot be brought within the purview of clause (iii) of section 10(10). I, therefore, hold that the assessee is entitled to exemption u/s 10(10)(i) in respect of gratuity amount received in total upto ₹ 10 lac, which covers a sum of ₹ 6,50,000/- received during the year. Overturning the impugned order on this score, I allow exemption u/s 10(10)(i) to the arrears of gratuity received by the assessee at ₹ 6,50,000/- during the instant year. 9. As regards the second amount of ₹ 1,88,720/- received by the assessee during the year towards the arrears of leave encashment, it is noticed that the assessee claimed exemption u/s 10(10AA)(i) which was refused by the AO by holding the case to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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