Income Tax Appellate Tribunal - Delhi
S.G. Aggarwal, Noida vs Assessee
IN THE INCOME TAX APPELLATE TRIBUNAL
(DELHI BENCH 'G' : NEW DELHI)
SHRI I.P. BANSAL, JUDICIAL MEMBER
and
BEFORE SHRI B.C. MEENA, ACCOUNTANT MEMBER
ITA No.4073/Del./2011
(ASSESSMENT YEAR : 2007-08)
Shri S.G. Aggarwal, vs. ITO, Ward 2 (2),
A - 135, Telecom City, Sector 62, Muzaffarnagar (U.P.)
NOIDA - 201 307 (U.P.).
(PAN : ABXPA4276A)
(APPELLANT) (RESPONDENT)
ASSESSEE BY : Shri Anurag Jain & Pramod Kr. Jain, CAs
REVENUE by : Shri D.K. Mishra, CIT DR
ORDER
PER B.C. MEENA, ACCOUNTANT MEMBER :
This appeal filed by the assessee emanates from the order of CIT (Appeals), Muzaffarnagar dated 29.06.2011 for the assessment year 2007-08.
2. The grounds of appeal read as under :-
"1. The order of the learned Commissioner of Income Tax (Appeals) confirming the action of the Assessing Officer of disallowing the claim of exemption of ex-gratia u/s 10(10C) of the I.T. Act and thereby making addition of Rs.5,00,000/- is contrary to law and on facts of the case.
2. The appellant craves leave to add, or amend any ground of appeal at the time of hearing."2 ITA No.4073/Del./2011
3. The assessee is an individual and is a retired employee of State Bank of Bikaner & Jaipur. The return of income was submitted declaring income at 3,10,680/- on 17.07.2007/ the assessee has taken voluntary retirement from the service under the Exit Option Scheme - 2005. The assessee has received ex-gratia amount of Rs.5,66,694/-. Out of which, assessee has claimed deduction under section 10(10C) of the Income-tax Act of Rs.5 lac.
4. We have heard both the sides on the issue. We find that this issue is covered by the decision of various Benches of ITAT. In the case of Jeevan Chandra Kabadwal vs. DCIT in ITA No.3152/Del/2010, the ITAT DELHI Bench 'D' held as under :-
"4. Before us, it was claimed that the issue raised by the assessee in the present appeal is covered in favour of assessee by the decision of ITAT, Kolkata Bench in the case of DCIT vs. Krishna Gopal Saha 121 ITD 368 (Cal.) Third Member, wherein the assessee was an employee of Standard Chartered Bank and had received compensation of Rs. 18,87,798/- as per Early Separation Plan (ESP). He claimed deduction of Rs. 5 lakh u/s 10(10C) of the Act. The employer vide their letter dated 14.11.06 stated that the employees availing the said ESP scheme are not eligible for exemption u/s 10(10C) of the Act as the scheme was not in conformity with the provisions of Rule 2BA(i) to (v). However, the said contention of the assessee was accepted by the Tribunal following the decision of Calcutta High Court in the case of SAIL DSP VR Employees Association Vs. Union of India 262 ITR 638 (Cal.) and it is held that an employee who takes voluntary retirement is entitled to get exemption u/s 10(10C) even if the payment is stretched over a period of years and further it was held that the provisions of sec. 10(10C) should be interpreted in a manner beneficial to the optee for Voluntary Retirement and it was held that assessee was entitled to exemption u/s 10(10C) of the Act.3 ITA No.4073/Del./2011
5. On the other hand, relying upon the order of AO and CIT(A) ld. DR submitted that the claim made by the assessee was rightly disallowed.
6. We have carefully considered the rival submissions in the light of material placed before us. The ground taken by AO for rejection of the claim of the assessee is that employer of the assessee had stated in para 10 that the proposed scheme did not comply with Rule 10(10C) of the Act and no benefit of exemption of ex-gratia for the Income Tax was intended in the scheme. Similarly in the aforementioned case of DCIT Vs. Krishna Gopal Saha the employer had stated that employees availing the said ESP scheme are not eligible for exemption u/s 10(10C) of the Act. Therefore, the facts of the present case and the facts of the aforementioned case of Kolkata Bench are similar and for the reasoning given therein, we find no justification in rejection of the claim of the assessee by the AO and, therefore, we hold that ld. CIT(A) has wrongly rejected the claim of the assessee and the addition made in this regard is deleted and appeal filed by the assessee is allowed." In the case of DCIT vs. Krishna Gopal Saha reported in 121 ITD 368 (Kol.)(TM), the Kolkata ITAT Bench 'B', Third Member has decided the issue in favour of the assessee. Similarly, the ITAT Ahmedabad Bench 'B' in ITA No.2557/Ahd/2010 in the case of ITO vs. Shri Vijaykumar B. Barot has decided the issue in favour of the assessee by holding as under :-
2. It was submitted before the learned CIT(A) that the assessee was serving with State Bank of India and he opted for Voluntary Retirement Scheme under Exit Option Scheme of State Bank of India wherein he received ex-gratia payment and claimed exemption u/s 10(10C) of the IT Act in respect of the amount received under Exit Option Scheme of the State Bank of India. The details were furnished. The decision in the case of Koodathil Kallyatan Ambujakshan, 309 ITR 113 (Bom.) was relied upon. It was also submitted that ITAT Ahmedabad Bench has followed the above decision in the case of Natvarlal K. Sharma Vs ACIT in ITA No.780/Ahd/2006 and allowed 4 ITA No.4073/Del./2011 exemption claimed by the assessee vide order dated 31-08-2007.
The learned CIT(A) following the above decisions deleted the addition.
3. The learned Counsel for the assessee at the outset submitted that the issue is further considered by the ITAT Ahmedabad Bench in the case of Smt. Shakuntalaben Naginkumar Shah in ITA No.537/Ahd/2010 dated 31-08-2010 and the appeal of the assessee has been allowed in respect of the similar scheme of State Bank of India. He has, therefore, submitted that the issue is covered in favour of the assessee. The learned DR did not dispute and submitted that the issue is covered in favour of the assessee.
4. By following the same decision of the Tribunal we are of the view that the issue is covered in favour of the assessee. The departmental appeal has no merit. The same is dismissed." In this case also, the employer was an associate bank of State Bank of India and in the case under consideration also, the employer is State Bank of Bikaner & Jaipur which is also an associate bank of the State Bank of India. In the case of ITO vs. Rohit Kumar Kantilal, ITAT Ahmedabad Bench 'A' in ITA No.969/Ahd/2010 has decided the disuse in favour of the assessee by holding as under :-
"3. The brief facts of the case are that assessee was an employee of State Bank of India had filed return of income for assessment year 2008-09 declaring total income of Rs.86,120/- . The Assessing Officer noticed that the assessee had opted for Early Retirement on 30-04-2007 and claimed exemption u/s.10(10C) amounting to Rs.5 lakh. The exemption of Rs.5 lakh u/s.10(10C) is available if the Voluntary Retirement Scheme satisfies the guidelines laid down in Rule 2BA of the Income-tax Rules, 1962 The AO issued notice u/s.148 of the Act and assessee filed return of income on 08-01-2010 declaring total income of Rs.86,120/-. The assessment was completed determining assessee's income at Rs.5,86,120/-.5 ITA No.4073/Del./2011
4. Aggrieved by this order of Assessing Officer assessee went in appeal before Ld. CIT(A). The Ld. CIT(A) deleted this addition by observing as under:-
"I have considered the facts of the case, Assessing Officer's findings and observations in the assessment order and detailed submission made by the appellant along with various decisions of ITATs, High Courts and Apex Court. The Income-tax Appellate Tribunal, Ahmedabad Bench "A" in the case of Smt. Jaya Narayanan and others vs. ACIT, Circle-15, Ahmedabad in ITA No.1209/Ahd/2007 and others has passed order in favour of the appellant following the claim of exemption u/s.10(10C) of the Act. I have gone through the order of the Assessing Officer and the order of the Hon'ble Income-tax Appellate Tribunal, Ahmedabad Bench "A" with regard to the claim of exemption u/s10(10C) of the Act. The ITAT has observed as under:-
'We find that ITAT, Mumbai Bench in a group of identical matters in ITA Nos.6384/Mum/2006 and others, in the case of Vaishali A. Shelar and others, vide order dated 28.03.2007 disposed of all the appeals involving similar question of law and facts i.e. exemption amount received on OERS u/s.10(10C) in favour of the assessee. The view of Mumbai Benches has been followed by Chennai Bench in consolidated order in ITA No.471/Mds/06 and others dated 30/.04.2007 in which similar issues about OERS being exempt u/s.10(10C) has been decided in favour of the assessee.' In the case of the appellant, the facts are identical, I respectfully follow the decision of Hon'ble ITAT Ahmedabad "A" Bench and grant the relief to the appellant with a direction to the Assessing Officer to allow the exemption u/s.10(10C) of the Act for Rs.5,00,000/-."6 ITA No.4073/Del./2011
Since the Ld. CIT(A) has given relief to the assessee by following decision of ITAT Ahmedabad Bench "A" in the case of Smt. Jaya Narayanan and Others (supra) in ITA No.1209/Ahd/2007 we find no infirmity in the order passed by Ld. CIT(A) and same is hereby upheld."
Considering all these decisions of ITAT relied upon, we allow the appeal of the assessee.
5. In the result, the appeal of the assessee is allowed.
Order pronounced in open court on this 29th day of February, 2012.
Sd/- sd/-
(I.P. BANSAL) (B.C. MEENA)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated the 29th day of February, 2012
TS
Copy forwarded to:
1.Appellant
2.Respondent
3.CIT
4.CIT(A), Muzaffarnagar.
5.CIT(ITAT), New Delhi.
AR, ITAT
NEW DELHI.