TMI Blog2024 (4) TMI 548X X X X Extracts X X X X X X X X Extracts X X X X ..... RAS HIGH COURT] has held that the amount received for encashment of leave salary would be a profit in lieu of salary and taxable under voluntary Separation Programme . The Hon ble Madras High Court in P. Arunachalam [ 1998 (2) TMI 42 - MADRAS HIGH COURT] also followed the dictum of Badami (supra). However the perusal of the aforesaid citation shows that the Hon ble Madras High Court held as above as there was an existing agreement, whereas there was no such agreement between assessee and his employer in the facts of the present appeal, hence, the facts of the present case are easily distinguishable. CIT(A) has rightly held that the receipt of the aforesaid amount, being on account of out of court settlement and on account of the value of pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition thereby leading to this appeal. 3. Revenue Department has filed this appeal raising following grounds : 1. Whether the Ld. CIT(A) was justified in holding that the payment of Rs. 2 crore received by the assessee from his employer was not salary though clause (i) sub section (3) of section 17 expressly provides that such payments are profits in lieu of salary. 2. Whether the Ld. CIT(A) was justified in deciding the issues involved in the case on the basis of judgment of the Hon'ble Delhi High Court in the case of Khanna Annadhanam vs CIT 258 CTR (Del) 72 where the assessee was a chartered Accountancy Firm. 3. Whether the Ld. CIT(A) was justified in deciding the issue involved in the case on the basis of judgement of the Hon'ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Deepak Verma, (2010) 194 taxman 265 (Delhi) as the assessment in that case was pertaining to the A.Y. 2001-02 i.e. before the insertion of Section 17(3)(iii) in the Act with effect from 01.04.2002. He has further argued that the Ld. AO was right in carrying out the aforesaid assessment by treating the aforesaid receipt of assessee as profits in lieu of salary. 8. Ld. Counsel for the assessee has argued that the Respondent-assessee received the aforesaid amount of Rs. 2 crore as lump sum amount as a settlement out of court with the employer (INX Media) of the assessee and voluntary settled the case as the reputation of the assessee was diminished due to extreme harassment and ill treatment caused by the employer. He also argued that the ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adras High Court in C.N.Badami (supra), has held that the amount received for encashment of leave salary would be a profit in lieu of salary and taxable under voluntary Separation Programme . The Hon ble Madras High Court in P. Arunachalam (supra) also followed the dictum of Badami (supra). However the perusal of the aforesaid citation shows that the Hon ble Madras High Court held as above as there was an existing agreement, whereas there was no such agreement between assessee and his employer in the facts of the present appeal, hence, the facts of the present case are easily distinguishable. Ld. CIT(A) has rightly held that the receipt of the aforesaid amount, being on account of out of court settlement and on account of the value of perqu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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