- (1.) THE Division Bench held thus: "5. That the amount received by the assessee on voluntary retirement is covered by s. 17(3)(i) of the IT Act, 1961, cannot be doubted. 'Profits in lieu of salary includes the amount of any compensation received by an assessee from his employer in connection with the termination of his employment. Cessation of employment because of voluntary retirement is also the termination of employment and the amount of the compensation received by the assessee from the employer in connection thereto is covered by 'profits in lieu of salary'. which indicated that the amount upto Rs. 5 lakhs received under VRS was exempt as per the provisions of s. 10(10C) and after allowing this exemption, any balance amount was not eligible for relief under s. 89. The Revenue also relied that the issue as to whether relief under s. 89 would be eligible for amount of compensation under VRS in excess of limit of exemption provided under s. 10(10C) of the IT Act was considered with the Ministry of Law in view of the judgment in the case of CIT vs. M. Raman (1999) 152 CTR (Mad) 497 : (2000) 245 ITR 856 (Mad) and the Ministry of Law advised filing of SLP and that SLP has been filed before the Supreme Court. 7. We wanted to know from the counsel for the Revenue about the status of the aforesaid SLP, which is said to have been filed by the Revenue from the judgment of the Madras High Court in the case of CIT vs. M. Raman (supra). Counsel for the Revenue, however, submits that despite the best efforts, he has not been able to get any information in this regard and, therefore, he is not in a position to make any statement in this regard. Be that as it may, once it is held that the amount received by the assessee on voluntary retirement under VRS is covered by s. 17, we see no impediment in the assessee getting benefit of s. 89 of the IT Act irrespective of the amount up to Rs. 5 lakhs being exempt under s. 10 (10C). The relief under s. 89 of the IT Act is entirely different and cannot be denied merely because an amount upto Rs. 5 lakhs received on voluntary retirement is exempted under s. 10(10C). Sec. 89 of the IT Act operates in a different field and the relief given to an assessee under s. 89 is for different purpose and cannot be mixed up with the exemption given under s. 10(10C). Clause (viii) of s. 10(10C), which provides that no exemption thereunder shall be allowed in relation to any other assessment year has nothing to do with the relief under s. 89, which is distinct and independent. 8. Our attention was also invited to s. 35DDA of the IT Act. We are afraid that the said section even remotely has no application to the assessee, who is not the employer. This section deals with amortisation of expenditure incurred under the VRS by the employer. It has nothing to do with the amount received by an employee (assessee) from his employer in connection with voluntary retirement under the VRS. 9. The Madras High Court in the case of CIT vs. M. Raman (supra) observed as under (p. 856 of 245 ITR) : 'The assessee has taken voluntary retirement from the service and received an amount of compensation at the time of his voluntary retirement. The question that arises is whether the compensation received by the assessee at the time of voluntary retirement would fall within the provisions of s. 17(3)(i) of the IT Act, 1961, that is, whether it can be regarded as salary and the assessee would be entitled to the relief provided, under s. 89 of the IT Act, 1961. This Court in the case reported in CIT vs. J. Visalakshi (1994) 120 CTR (Mad) 248 : (1994) 206 ITR 531 (Mad), held that if an employee receives at the time of resignation, the amount the same could be regarded as salary and the assessee would be entitled to relief provided under s. 89 of the IT Act, 1961. The said principle rendered by this Court in the case of resignation would equally apply to the case of voluntary retirement of an employee from service. Accordingly, the Tribunal was right in holding that the amount received by the employee at the time of voluntary retirement from service would be regarded as salary, and the relief under s. 89 of the IT Act, 1961, would be admissible in respect of the amount received by the assessee from his employer at the time of voluntary retirement. 10. The legal position exposited by the Madras High Court does not get changed because of the provision contained in s. 10(10C). 11. In this view of the matter, the finding of the Tribunal that the assessee is entitled to relief under s. 89 of the IT Act on VRS amount exceeding Rs. 5 lakhs exempted under s. 10(10C) of the IT Act cannot be said to be erroneous."
(2.) MS . Parinitoo Jain, the counsel for the Revenue, submits and, in our view, fairly that the controversy raised in this income -tax appeal stands squarely concluded by the forenoted judgment.
(3.) THIS appeal is, accordingly, dismissed.;