TMI Blog1989 (5) TMI 80X X X X Extracts X X X X X X X X Extracts X X X X ..... accumulation of superannuation fund received from the employer was exempt under section 10(13)(ii). 2. The assessee was an employee of Shri Arbuda Mills Ltd. He had a massive coronary infraction and so he resigned. Thereupon he was paid the aforesaid sum. The ITO rejected the assessee's claim on the ground that the assessee's ill-health was only a temporary phase requiring rest to recover and no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve to be accepted. The Commissioner has allowed the assessee's claim merely stating that the aforesaid amount was exempt under section 10(13)(ii). 3. Before us the learned departmental representative argued that the assessee had not been "incapacitated", which was required under the said provision. The assessee's counsel pointed out that the salary in the earlier employment was Rs. 8,000 whereas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed prior to the retirement. The intention of the Legislature appears to be to give the benefit to the employee on his incapacity before retirement. If this employee would not have had the misfortune of being incapacitated sometime before the retirement date he would have had this benefit of exemption. Secondly an employee who retires in the normal course would get this exemption even though after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yment is made at a particular time it is the incapacity at that point of time which is to be seen. It may be true that the assessee took another employment subsequently in June 1983. But that does not mean that the assessee was not incapacitated at the time when he resigned. We cannot overlook the fact that it was not in the assessee's financial interest to forego a much higher salary than the one ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l representative pointed out that the exemption could be granted for payment of leave salary in respect of period of earned leave at the employee's credit "at the time of retirement, whether on superannuation or otherwise". He submitted that resignation was not covered by this expression. The assessee's counsel relied upon the decision of the Madras High Court in the case of CIT v. R.J. Shahney [1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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