SURESH YASHWANT AWAR,IGATPURI vs. ASSISSTANT COMMISSIONER OF INCOME TAX, CIRCLE 1, AURANGABAD, AURANGABAD

ITA 2660/PUN/2025Status: DisposedITAT Pune12 June 2026AY 2016-179 pages
AI SummaryAllowed

What were the facts?

The assessee, an ex-employee, received an Early Retirement Scheme (ERS) payment and claimed relief under Section 89. The Assessing Officer (AO) reclassified the payment as 'profits in lieu of salary' under Section 17(3) and granted lesser relief, which was upheld by the CIT(A).

What did the Tribunal hold?

The Tribunal held that payments received under an ERS, if voluntary and without legal obligation on the employer, are not 'profits in lieu of salary' under Section 17(3). Therefore, the AO's reclassification and consequent reduction in relief were incorrect.

What were the issues?

Whether the payment received under an Early Retirement Scheme is to be treated as 'profits in lieu of salary' under Section 17(3) for the purpose of calculating relief under Section 89.

Which sections of the Income-tax Act were involved?

Section 89,Section 17(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH, PUNE

Before: SHRI R.K. PANDA & MS. ASTHA CHANDRA

For Appellant: Shri Nikhil S Pathak &
For Respondent: Shri Sandip Pawar

PER ASTHA CHANDRA, JM :

The appeal filed by the assessee is directed against the order dated 16.09.2025 of the Ld. Additional/Joint Commissioner of Income Tax (Appeals)-4, Chennai [“Addl./JCIT(A)”] pertaining to Assessment Year (“AY”) 2016-17. 2. Briefly stated facts of the case are that the assessee is an individual and was an ex-employee of Colgate Palmolive (India) Ltd. (“Colgate Palmolive”) and earned income from salary and other sources during the relevant AY 2016-17. For AY 2016-17, the assessee filed his return of income electronically on 14.06.2016 declaring total income of Rs.31,8

The order continues below.

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