P.Krishna, J. - (1.) The Income-tax Appellate Tribunal, Delhi, at the instance of the Income-tax Department has referred the following two questions of law under section 256(1) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), for the opinion of this court : "1. Whether, on the facts and in the circumstances of the case, the learned Tribunal was justified in law in fully concurring with the reasonings of the Appellate Assistant Commissioner granting exemption to the payments received in lieu of leave encashment to the assessee while in service ? 2. Whether, on the facts and in the circumstances of the case, learned Tribunal was justified in law in not giving effect in the cases under considering to the amendment to section 10(10AA) by the Taxation Laws (Amendment) Act, 1984 (Part I) which has been amended retrospectively with effect from the assessment year 1978-79 ?
(2.) The assessment year 1983-84 is involved in the present reference. The brief facts of the case are as follows :
(3.) The assessee-respondent, an employee of the District Co-operative Bank Limited, Bijnore, for the accounting period ended on March 31, 1983, relevant to the assessment year 1983-84 received a certain sum of money by way of leave encashment from the District Co-operative Bank, Bijnore. The Income-tax Officer treated the said receipt by way of leave encashment as the assessee's salary income in terms of section 15 read with section 17 of the Act. He negated the assessee's claim for exemption in respect of the aforesaid leave encashment in terms of section 10(10AA) of the Act. The Appellate Assistant Commissioner of Income-tax as well as the Income-tax Appellate Tribunal have accepted the aforesaid plea of the assessee and held that the sum received by the assessee by way of leave encashment from the District Co-operative Bank is exempt under section 10(10AA) of the Act.;