GUDIPATI SRINIVASA RATNA,HYDERABAD vs. ITO., WARD-4(1), HYDERABAD

ITA 10/HYD/2024Status: HeardITAT Hyderabad10 April 2024AY 2018-19Bench: SHRI RAMA KANTA PANDA (Vice President), SHRI K.NARASIMHA CHARY (Judicial Member)6 pages
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What did the Tribunal hold?

The Tribunal held that the amount received by the assessee on account of loss of employment due to company closure partakes the character of a capital receipt and is not taxable. The Tribunal followed previous decisions in similar cases.

What were the facts?

The assessee received Rs. 44,88,453/- as a one-time settlement payment (ex-gratia) upon the closure of his employer, Instrumentation Ltd., Kota, and subsequent forced VRS. The Assessing Officer allowed an exemption of Rs. 5 lakhs under Section 10(10C) and taxed the balance.

What were the issues?

Whether the ex-gratia payment received by the assessee due to forced VRS upon company closure is a capital receipt and fully exempt from tax, or taxable beyond the Rs. 5 lakhs limit under Section 10(10C).

Which sections of the Income-tax Act were involved?

Section 10(10C),Section 10(10B),Section 17(3)(i)

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Cases cited in this judgment(2)Show list

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Income Tax Appellate Tribunal, HYDERABAD BENCHES “B”, HYDERABAD

Before: SHRI RAMA KANTA PANDA & SHRI K.NARASIMHA CHARY

For Appellant: Shri Kali Kiran Kumar Kovvada, AR
Hearing: 10/04/2024

PER K. NARASIMHA CHARY, J.M: Aggrieved by the order dated 08/11/2023 passed by the learned Commissioner of Income Tax (Appeals)- National Faceless Appeal Centre (NFAC), Delhi (“Ld. CIT(A)”), in the case of Gudipati Srinivasa Ratna (“the assessee”) for the assessment year 2018-19, assessee preferred this appeal.

2.

Brief facts of the case are that assessee is an individual and he was employed with Instrumentation Ltd., Kota ILK. Ministry or Union Cabinet decided-to windup ILK on 30-11-2016. Assessee is ceased to be employee of ILK with effect from 18/04/201

The order continues below.

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