The Commissioner Of Income Tax vs M/S.C P Lonappan & Sons on 13 August, 2009

       

  

  

 
 
  IN THE HIGH COURT OF KERALA AT ERNAKULAM

ITA.No. 1169 of 2009()


1. THE COMMISSIONER OF INCOME TAX,
                      ...  Petitioner

                        Vs



1. M/S.C P LONAPPAN & SONS,
                       ...       Respondent

                For Petitioner  :SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES)

                For Respondent  : No Appearance

The Hon'ble MR. Justice C.N.RAMACHANDRAN NAIR
The Hon'ble MR. Justice C.K.ABDUL REHIM

 Dated :13/08/2009

 O R D E R
                  C .N. RAMACHANDRAN NAIR &
                       C. K. ABDUL REHIM, JJ.
                  --------------------------------------------
                        I.T.A. No.1169 OF 2009
                  --------------------------------------------
                 Dated this the 13th day of August, 2009

                               JUDGMENT

Ramachandran Nair,J.

The question raised is about the assessee’s entitlement towards

deduction of Rs. 17-odd lakhs paid to employees under Voluntary

Retirement Scheme. Even though senior standing counsel appearing

for the revenue submitted that the assessee has closed the business and

therefore deduction by way of terminal benefits to the employees is not

allowable deduction, we notice from the Tribunal’s order that the

purpose of payment was to release some of the employees from service

for reorienting the business to suit the changed economic scenario. It is

clear from the Tribunal’s finding that the business is continuing after

restructure. So much so we find that the Tribunal rightly allowed the

appeal. This appeal is consequently dismissed. However, if facts

assumed by the Tribunal based on which decision is rendered are

incorrect, it is for the department to verify whether the assessee has

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closed business in that year and if required to move the Tribunal for

rectification of the orders.

(C.N.RAMACHANDRAN NAIR)
Judge.

(C. K. ABDUL REHIM)
Judge.

kk

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