RAJ KAMAL VERMA, NOIDA,GAUTAM BUDDH NAGAR vs. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-1(1), RAIPUR, RAIPUR

This appeal preferred by the assessee emanates from the order of the Ld. CIT(Appeals)/NFAC, Delhi dated 24.03.2023 for the assessment year 2019-20 as per the following grounds of appeal on record:

At the time of hearing, none appeared for the assessee and an adjourment petition has been filed which is hereby rejected. Considering the entire facts and circumstances and hearing the submissions of the Ld. Sr. DR, the matter is heard.

The facts on record are that the assessee is a Executive Director in the Board of Union Bank of India and admittedly, it is a public sector bank wherein the majority of the stake holding is with the goverment. In such scenierio, durign the assessment proceedings, it was observed by the A.O that the assessee had received leave encashment of Rs.21,05,880/-. The A.O was of the view that the assessee is an employee of a private sector bank, therfore, such amount could not be allowed as deduction. Accordingly, in this regard, the A.O allowed exemption only of Rs.3 lacs out of Rs.21,05,880/- and an amount of Rs.18,05,880/- was disallowed and added to the total income of the assessee.

On appeal before the first appellate authority, the Ld. CIT(Appeals)/NFAC upheld the disalloance of Rs.18,05,880/-.

The assessee being aggrieved with the order of the Ld. CIT(Appeals) has carried the matter in appeal before the Tribunal.

I have carefully considered the facts and submissions of the Ld. Sr. DR and examined the documents available on record. This is a case where leave encashment amount has been disallowed by the A.O which had been uphled by the Ld. CIT(Appeals)/NFAC on the ground that the concerned assessee is a private sector employee. However, it is an admitted fact that he is an Executive Director of the Board of Union Bank of India which is a public sector bank wherein goverment is having majority of share holding, In such scenerio, the assessee who is responsibly holding a position of such Executive Director in a public sector bank is a goverment employee and not a private employee. The Assessing Officer as well as the Ld. CIT(Appeals)/NFAC had not brought on record any material which would prove that the assessee is an employee of a private sector and not a goverment employee. Rather, on the contrary, as per the facts available on record, it is established that the assessee is an employee of the govement being Executive Director of Board of the Union Bank of India. Considering these facts, the addition of Rs.18,05,880/- made/sustained by the lower authorites is unjustified, arbitrary and bad in law and thus, the same is deleted.

As per the aforesaid terms the grounds of appeal raised by the assessee are allowed.

In the result, appeal of the assessee is allowed.