TMI Blog1986 (1) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee by giving him the requisite three months' notice. In addition to the pay and salary for the period of notice, the employer paid to the assessee a sum of Rs. 24,933. The question was whether this amount could be treated as profits in lieu of salary within the meaning of sub-clause (i) of clause (3) of section 17 of the Income-tax Act, 1961 (" the Act"). The employer had, by its letter dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was paid by the employer voluntarily without being under any obligation to pay it. Section 17 deals with salary, perquisite and profits in lieu of salary. Clause (3) reads : "(3) ' profits in lieu of salary ' includes (i) the amount of any compensation due to or received by an assessee from his employer or former employer at or in connection with the termination of his employment or the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. Under the conditions of service, his services were liable to be terminated on giving three months' notice without assigning any reason. Under the circumstances, it cannot be said that the assessee was entitled to remain in service for any period longer after the requisite notice has been given or that the employer was under any obligation to pay anything to the assessee in connection with the t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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