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| The Tax Publishers2020 TaxPub(DT) 0909 (Mum-Trib) INCOME TAX ACT, 1961
Section 17(3)(iii)
As evident, amount received by assessee was not only the simple compensation. He had to enter into an agreement with employer company in which condition of non-competing and non-disclosure of the agreement also existed. Accordingly, amount involved could not be assessed as profit in lieu of salary under section 17(3)(iii) and addition was deleted.
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Salary - Profit in lieu of salary under section 17(3)(iii) - Amount received on voluntary resignation subject to condition of non-competing and non-disclosure -
Assessee received Rs. 60 lakhs from M/s. S, the employer, which was not offered in return of income. Form No. 16 issued by M/s.S. spoke that TDS of Rs. 16,83,340 was deducted by the employer. Assessee claimed refund of Rs. 17,02,973 on said TDS which was granted to him. Since amount received was not shown as income, same was added to income of assessee and accordingly taxed. Assessee contended that it was ad hoc compensation received from employer on voluntary resignation and same being receipt for termination of source of income, was a capital receipt, and could not be taxed as Income from salary. HELD: As evident, amount received by assessee was not only the simple compensation. He had to enter into an agreement with employer company in which condition of non-competing and non-disclosure of the agreement also existed. Accordingly, amount involved could not be assessed as profit in lieu of salary under section 17(3)(iii) and addition was deleted.
REFERRED :
FAVOUR : In assessee's favour
A.Y. : 2011-12
IN THE ITAT, G MUMBAI BENCH
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