Compensation under Early Retirement Scheme cannot be taxed as profits in lieu of salary

Muktabai Ramesh Shelar Vs ACIT (ITAT Pune) The Income Tax Appellate Tribunal (ITAT), Pune allowed the assessee’s appeal against the order of the Commissioner of Income Tax (Appeals), which had upheld the addition of compensation received under an Early Retirement Scheme (ERS)/Voluntary Retirement Scheme (VRS) as “profits in lieu of salary” under Section 17(3)(i) of the Income-tax Act, 1961. The assessee, an employee of Colgate Palmolive Ltd., filed the return of income for Assessment Year (AY) 2016-17 claiming relief under Section 89 in respect of compensation received on ret...