RAKESH KUMAR GUPTA,NIPANIA, INDORE vs. ACIT, CIRCLE-2(1), TRIVANDRUM

Brief facts of the case are that the appellant is an individual deriving income under the head ‘salaries’. The return of income for AY 2016-17 was filed on 31.07.2016 disclosing income of Rs. 2,12,99,370/-. Against the said return of income, the assessment was completed by the ACIT, Circle-2(1), Thiruvananthapuram Rakesh Kumar Gupta (hereinafter called "the AO") vide order dated 26.12.2018 passed u/s. 143(3) of the Income Tax Act, 1961 (the Act) at a total income of Rs. 7,19,81,961/-. While doing so, the AO made addition of Rs. 5,06,82,591/- being the amount received on termination of employment from Allianz Cornhill Information Services Pvt. Ltd., which was claimed to be capital receipt.

Being aggrieved, an appeal was filed before the CIT(A), who vide the impugned order dismissed the appeal placing reliance on pos 17(3) of the Act.

Being aggrieved, the appellant is in appeal before this Tribunal in the present appeal.

When the appeal was called on nobody appeared on behalf of the assessee despite due service of notice of hearing. Therefore, we proceeded to dispose of the appeal after hearing the learned Sr. DR.

We have heard the rival contentions and perused the material available on record. The ld. CIT-DR, placing reliance on the plain provisions of section 17(3), submits that the amount in question is clearly chargeable as salary. Provisions of section 17(3) reads as under: - "Salary", "perquisite" and "profits in lieu of salary" defined.

For the purposes of sections 15 and 16 and of this section,— (3) "profits in lieu of salary" includes— (i) the amount of any compensation due to or received by an assessee from his employer or former employer at or in connection with the termination of his employment or the modification of the terms and conditions relating thereto; (ii) any payment (other than any payment referred to in clause (10), clause (10A), clause (10B), clause (11), clause (12), clause (13) or clause (13A) of section 10), due to or received by an assessee from an employer or a former employer or from a provident or other fund, to the extent to which it does not consist of contributions by the assessee or interest on such contributions or any sum received under a Keyman insurance policy including the sum allocated by way of bonus on such policy. Explanation.—For the purposes of this sub-clause, the expression "Keyman insurance policy" shall have the meaning assigned to it in clause (10D) of section 10; (iii) any amount due to or received, whether in lump sum or otherwise, by any assessee from any person— (A) before his joining any employment with that person; or (B) after cessation of his employment with that person.

In the result, the appeal filed by the assessee stands dismissed.