Commissioner of Income Tax vs S.R. Rathi

The assessee was president of Shree Synthetics Ltd., from August 1, 1970, to September 6, 1988. He, however, became an executive director of the company from September 7, 1988. It seems that he received gratuity and leave encashment and for that he claimed deduction of Rs. 93,780 under Clauses (10A) and (10AA) of Section 10 of the Income Tax Act, 1961. His claim was negatived by the Assessing Officer. On appeal the Commissioner of Income Tax (Appeals) upheld the assessee''S claim and directed the Assessing Officer to scrutinise the claim of deduction per law and allow the same in the computation of total income.

The Revenue felt dissatisfied and took appeal, to the Income Tax Appellate Tribunal. The Tribunal on consideration of the matter found that the assessee had attained 58 years on September 6, 1988, entitling him to retiremental benefits and that the Commissioner of Income Tax (Appeals) had correctly decided the matter. On the second issue, it found on the facts that deduction of Rs. 1,46,000 was also justified.

The Revenue is in appeal against this and its counsel Shri Pawnekar submitted that the forums below had not correctly applied the provisions of Section 10 of the Act.

Heard learned counsel and examined the orders passed by the forums below and in our view the issues raised are factual in nature and do not give rise to any substantial question of law warranting entertaining of an appeal under the newly added Section 260A of the Income Tax Act which provides for an appeal only where the matter involves a substantial question of law. This appeal is accordingly dismissed.