KALYANASUNDARAM RANJITHKUMAR,THIRUVARUR vs. ITO, NCW-22(6), TAMBARAM

ITA 1622/CHNY/2025Status: DisposedITAT Chennai04 September 2025AY 2019-20Bench: Shri S.S. Viswanethra Ravi (Judicial Member)1 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the ex-gratia payment received was voluntary and not a compensation for services or in lieu of employment, hence not taxable under Section 17(3)(i) of the Act. It was considered a capital receipt.

What were the facts?

The assessee, a salaried employee, received an ex-gratia payment upon the closure of a unit. The assessee claimed this amount as exempt income under Section 10 of the Income Tax Act, but the Assessing Officer disallowed it, holding it was not covered by relevant CBDT circulars. The CIT(A) upheld this disallowance.

What were the issues?

Whether the ex-gratia payment received by an employee upon closure of a unit is taxable as income or a capital receipt, and whether it falls under Section 17(3)(i) of the Income Tax Act.

Which sections of the Income-tax Act were involved?

Section 10,Section 89,Section 17(3),Section 139(1),Section 148

AI-generated summary — verify with the full judgment below

Before: Shri S.S. Viswanethra Ravi

Hearing: 01.09.2025Pronounced: 04.09.2025

This appeal filed by the assessee is directed against the order dated 06.11.2023 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi for the assessment year 2019-20. 2. This appeal is filed with a delay of 489 days. The assessee filed petition for condonation of delay stating the reasons in support of an affidavit. Upon hearing both the parties and on examination of the said affidavit, I find the reasons stated by the assessee are bonafide, which 2 I.T.A. No.162

The order continues below.

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