Law: Income Tax Act, 1922

Section: 7,7(1),

Income tax Act (XI of 1922)---S.7(1), Explanation 2 Separation allowance Taxability of-Where payment of separation allowance by employer to assessee was not for past services, same, held, was exempt from tax under S.7(1), Explanation(2). JUDGMENT MUHAMMAD ZAHOORUL HAQ, J. Following question has been referred to us by the applicant under section 66(1) of the Income tax Act: "Whether on the facts and in the circumstances of the case, the Tribunal was justified in holding that the separation allowance of Rs.9,282 paid to the assessee was not liable to tax under the provisions of Explanation 2 to subsection (1) of section 7 of the Income tax Act?" 2. Mr. Kazim Hussain appearing on behalf of Mr. Waheed Farooqui, Advocate for the Commissioner of Income tax states that a similar question was referred to the High Court in I.T.R. 527/72, but it was answered in the affirmative. Mr. Kazim states that he would canvass for an answer in the negative. 3. We have gone through the judgment of the Division Bench in I.T.R. 527/72, dated…

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