Employer’s Voluntary Ex-gratia Compensation not taxable U/s. 17(3)(i): ITAT Delhi

ITO Vs Avirook Sen (ITAT Delhi) The case of ITO Vs Avirook Sen (ITAT Delhi) revolves around the taxation of voluntary ex-gratia compensation paid by an employer to an employee after termination from service. The Revenue contested the deletion of an addition of Rs. 2,13,08,444/- by the CIT(A). The crux of the dispute lies in whether the amount received by the assessee from the employer constitutes profits in lieu of salary under section 17(3)(i) of the Income Tax Act, 1961. The AO treated the sum of Rs. 2 crore as a component of salary along with Rs. 13,08,444/- received as perquisites. However...