IN INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC-1 , NEW DELHI Before Sh. N. K. Saini, Accountant Member ITA No. 1087/Del/2016 : Asstt. Year : 2009-10 Dr. SB Kalidhar, Vs Income Tax Officer, Villa 709, Gillco Valley, Kharar, Ward-4, Sector-14, SAS Nagar, Punjab-140301 Hisar-125001 (APPELLANT) (RESPONDENT) PAN No. ABSPK1518Q Assessee by : Sh. SB Kalidhar Revenue by : Sh. F. R. Meena, Sr. DR Date of Hearing : 22.09.2016 Date of Pronouncement : 28.09.2016 ORDER This is appeal by assessee against order dated 12.01.2016 of ld. CIT(A), Hisar. 2. only grievance of assessee in this appeal relates to denial of exemption u/s 10(10AA)(ii) of Income Tax Act, 1961 (hereinafter referred to as Act) towards Leave Encashment to extent of Rs.1,94,340/-. 3. Facts of case in brief are that assessee filed retrun of income on 25.05.2009 declaring income of Rs.4,06,000/- which was processed u/s 143(1) of Act. AO observed that assessee in computation of total income annexed with return of income claimed sum of 2 ITA No. 1087/Del/2016 SB Kalidhar Rs.4,94,340/- received as Leave Encashment to be exempted u/s 10(10AA) of Act. AO was of view that assessee was entitled for exemption on account of Leave Encashment upto return of Rs.3,00,000/-. He accordingly made addition of Rs.1,94,340/- and assessed income at Rs.6,00,340/- by observing as under: In view of finding given in foregoing paras, employee of CCS HAU cannot be termed as Govt. employee as neither they are under control of Haryana Govt. nor their pay is debited to consolidated funds of state. Application of CSR Vol. II does not confer vice-versa status as Govt. employee under any rule/authority as claimed by assessee. Hence, it is clear that university employees are covered u/s 10(10)(iii) of Income-tax Act, 1961. In view of these facts, exemption allowable to assessee in respect of gratuity and leave encashment is only 3,00,000 lacs which has already been claimed/ allowed. Thus, claim of assessee for exemption of leave encashment of Rs.1,94,340/- is not in order and is added back to income of assessee. Penalty proceedings u/s 271(1)(c) are initiated for furnishing of inaccurate particular of its income. In view of discussion in foregoing paras income of assessee is computed as under Returned income : Rs.4,06,000/- Addition on accou nt of gratuity as di scu ssed above : Rs. 1,94,340/- Assessed Incom e : Rs.6,00,340/- 3 ITA No. 1087/Del/2016 SB Kalidhar 4. Being aggrieved assessee carried matter to ld. CIT(A) who sustained addition made by AO by observing in para 7.2.10 of impugned order as under: 7.2.10 Considering above discussion I hold that appellant is neither employee of State Government nor holder of civil post under State for provisions of Income Tax Act. In Section 10(10AA) full exemption from leave encashment at time of retirement is available to employees of Central Government and State Government only. For other employees exemption is available only up to 3 lakhs. present case of appellant falls under second category which is covered by provisions of section 10(10AA) (ii) of Income Tax Act. I hold that appellant who is employee of Haryana Agricultural University cannot be regarded as employee of State Government for purpose of Income Tax. present case is covered by Section 10(IOAA)(ii) of Income Tax Act and not by Section 10(10AA)(i) of Income Tax Act. Therefore, assessing officer has rightly made additions on account leave encashment of Rs. 1,94,3407- to total income of assessee. Appeal of appellant is dismissed. 5. Now assessee is in appeal. ld. Counsel for assessee at very outset stated that issue under consideration has already been decided by various benches of ITAT New Delhi in favour of assessees wherein identical facts were involved. He furnished copies of following orders: 4 ITA No. 1087/Del/2016 SB Kalidhar Sh. Ram Kanwar Rana Vs ITO, Ward-3, Hisar in ITA No. 1307/Del/2016 dated 16.06.2016 Sh. Raghubir Singh Panghal Vs ITO, Ward-3, Hisar in ITA No. 1308/Del/2016 dated 16.06.2016 Sh. Joginder Paul Bhanot Vs ITO, Ward-2, Hisar in ITA No.1219/Del/2016 dated 19.07.2016 Sh. Bhupendra Kumar Nehra Vs ITO, Ward-1, Hisar in ITA No. 1222/Del/2016 dated 20.07.2016 Sh. Ram Dhari Rana Vs ITO, Ward-3, Hisar in ITA No. 1360/Del/2016 dated 10.08.2016 Sh. Anant Kumar Gupta Vs ITO, Ward-1, Hisar in ITA No. 1361/Del/2016 dated 10.08.2016 6. In his rival submissions ld. DR supported orders of authorities below. 7. I have considered submissions of both parties and perused material available on record. It is noticed that identical issue having similar facts has already been adjudicated by ITAT Delhi Benches, SMC-1 , New Delhi in ITA No. 1307/Del/2016 for assessment year 2010-11 in case of Ram Kanwar Rana Vs ITO, Ward-3, Hisar, wherein relevant findings have been given in para 10 of order dated 16.06.2016 which read as under: 10. I have heard rival submissions and perused relevant material on record. ld. AR submitted that there is not much difference in language of section 10(10)(i) and 10(10AA)(i) and view taken in respect of arrears of gratuity u/s 10(10) should be followed for arrears of leave 5 ITA No. 1087/Del/2016 SB Kalidhar encashment u/s 10(10AA). ld. DR supported this proposition. As both sides are consensus ad idem on position that view taken in context of section 10(10) as applicable to leave gratuity be followed here in context of section 10(10AA) in context of leave encashment, I am desisting from independently examining later provision. In view of fact that I have held assessee to be entitled to exemption u/s 10(10)(i) in respect of arrears of gratuity, following same, I extend benefit of exemption u/s 10(10AA)(i) in respect of arrears of leave encashment. This ground is allowed. 8. Since facts of assessee s case are identical to facts involved in aforesaid referred to case of Sh. Ram Kanwar Rana. So, respectfully following order dated 16.06.2016 in case of Ram Kanwar Rana Vs ITO (supra), impugned order is set aside and AO is directed to allow claim of assessee on account of Leave Encashment. 9. In result, appeal of assessee is allowed. (Order Pronounced in Court on 28/09/2016) Sd/- (N. K. Saini) ACCOUNTANT MEMBER Dated: 28/09/2016 Subodh Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5.DR: ITAT ASSISTANT REGISTRAR SB Kalidhar v. Income-tax Officer, Ward-4, Hisar