SRI KUSHAL SEN GUPTA ,KOLKATA vs. THE INCOME TAX OFFICER WARD-1(2), BANGALORE

O R D E R

PER SHRI PAVAN KUMAR GADALE, JM :

3. The Brief facts of the case are that the assessee has filed the Return of Income on 30.10.2006 declaring total income of Rs.1,51,200 subsequently, the case was selected for scrutiny and Notice under Section 143(2) of the Act was issued whereas the assessee in the Return of Income mentioned that Rs.16 lakhs was received as compensation settlement from Kotak Mahindra Old Life Insurance Co. Ltd. and claimed as exempted income. The assessee was issued show cause notice on 14.11.2008 to submit copy of retainership agreement and compromise agreement and the assessee submitted that he is not in a position to submit the information/details in the assessment proceedings. Whereas the Assessing Officer has passed Best Judgment Assessment under Section 144 of the Act with addition of Rs.16 lakhs and determined the total income of Rs.17.51,200 and passed assessment order under Section 144 of the Act Dt.17.2.2008. Aggrieved by the order, the assessee filed an appeal with the CIT(Appeals). But the CIT(Appeals) appeal has dismissed the assessee's appeal. Aggrieved by the order of CIT(Appeals), the assessee filed an appeal with the Tribunal.

4. At the time of hearing, the ld. AR submitted that the CIT(Appeals) has erred in confirming the addition and further the compensation received is in the nature of capital receipt as the assessee was terminated from service before the tenure and supported her arguments with Paper Book with evidence of Service Agreement, copy of consent terms and prayed for allowing the assessee's appeal. Contra, the learned Departmental Representative supported the orders of learned CIT(Appeals) and submitted that the contract of the assessee is for 36 months and could not claim the receipt as exempted and prayed for dismissal of the appeal. 5. We heard the rival contentions and perused the material on record. Prima facie, the contention of the learned Authorised Representative that the assessee was employed with Kotak Mahindra Life Insurance Co. Ltd. and as per the Service Agreement, the assessee was engaged as Sales Consultant for distribution of insurance products with annual salary of Rs.12 lakhs. Whereas the assessee has not resigned voluntarily from the