Sudhakar Ratan Shankar Gautam vs. ITO

Parties Involved

Facts Summary

Sudhakar Ratan Shankar Gautam, the appellant, was employed with You First Money Express Private Limited, which was acquired by Ebix Money Express Private Limited. Following the acquisition, Gautam's employment was terminated on 26th October 2017, and he received a severance compensation of Rs.15,50,905/-. Gautam claimed this amount as a capital receipt not chargeable to tax in his income return for the Assessment Year 2018-19. The Assessing Officer treated this amount as 'profits in lieu of salary' under Section 17(3) of the Income-tax Act, 1961, leading to an assessed income of Rs.22,80,695/-. The Commissioner of Income Tax (Appeals) confirmed the addition made by the Assessing Officer. Gautam appealed against this order, contending that the compensation was a capital receipt and not taxable as salary under Section 17(3) of the Act.…

Legal Issues

• 1. Whether the compensation of Rs.15,50,905/- received by the assessee constitutes a capital receipt or profits in lieu of salary under Section 17(3) of the Act.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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