The Commissioner of Income Tax and Another vs Y. Dwarakanath

D.V. Shylendra Kumar, J.—This appeal by the revenue u/s 260-A of the income tax Act, 1961 (for short, ''the Act''), though had been admitted to examine the following substantial questions of law, is listed for hearing:

Whether the Tribunal was correct in holding that the payment received by the assessee of Rs. 11,49,467/- is a capital, receipt not liable to tax when the employer-employee relationship between CISCO Systems and the assessee had not materialised and therefore the amount received could not be treated as profit in lieu of salary u/s 17(3)(iii) of the Act?

Whether the Tribunal was correct in holding that there was no employer-employee relationship ignoring the fact that Form 16 issued by the employer company points to the fact that the assessee was an employee owing to the acceptance of the offer letter given by CISCO Systems, conferring the status of an employee on the assessee without which the payment received for termination of service would not have been made by the employer?

Sri K.V. Aravind, learned Standing Counsel for the appellant-revenue and Sri C.V. Mudrabettu for Sri S.R. Shivaprakash, learned Counsel for respondent-assessee submit that having regard to the valuation of the subject-matter of this appeal, which is in a sum of Re. 3,58,904/- and having regard to the board circular, the appeal, though, may be disposed of as not tenable, liberty may be reserved to the appellant-revenue for reviving the matter in the event of success of the revenue before the Supreme Court in SLP No. 27468 of 2010 and connected matters, wherein a similar orders have been made subject-matter.

In the light of this submission, this appeal is dismissed only on the ground of valuation and maintainability, but reserving liberty to the revenue to seek for revival of the appeal in the event of success in the SLP before the Supreme Court, as noticed above.