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The Tax Publishers S.S.N. Ravi v. Asstt. CIT [ITA No. 933 (Mds) of 2015, dt. 6-5-2016] : 2016 TaxPub(DT) 2545 (Chen-Trib) Sign in bonus--Repaid by subsequent employment--Addition whether sustainable *Facts:* Assessee was offered a taxable employment sign in bonus by Barclays bank where in it was agreed if he left the job before a cut off period the sign in bonus was to be refunded. The assessee left Barclays voluntarily and joined Deutsche bank due to better offer. The sign in bonus was repaid by Deutsche. Assessee had not offered the sign in bonus in the tax return and claimed a refund thus went into scrutiny and addition of the sign in bonus was made which was also upheld by the Commissioner (Appeals) holding that there is no provision which allows one to reduce the salary income i.e. the sign in bonus. Aggrieved assessee went in appeal: Held against the assessee that the sign in bonus addition does not require a deletion on examination of facts by Commissioner (Appeals). Note: What would have been the case if the sign in bonus would have not been refunded with a compensatory payout by Deutsche bank, the very fact of a covenant existing for repaying it on termination voluntary or otherwise would have perhaps made it a contractual employment related payout thus only the net salary could have been taxed which is true like salary accrued but not received on real income principles. The fact of it refunded by the subsequent employer perhaps made it appear to be a benefit derived out of employment. It is the restitution which made it taxable thus.

The Tax Publishers

S.S.N. Ravi v. Asstt. CIT [ITA No. 933 (Mds) of 2015, dt. 6-5-2016] : 2016 TaxPub(DT) 2545 (Chen-Trib)

Facts:

Assessee was offered a taxable employment sign in bonus by Barclays bank where in it was agreed if he left the job before a cut off period the sign in bonus was to be refunded. The assessee left Barclays voluntarily and joined Deutsche bank due to better offer. The sign in bonus was repaid by Deutsche. Assessee had not offered the sign in bonus in the tax return and claimed a refund thus went into scrutiny and addition of the sign in bonus was made which was also upheld by the Commissioner (Appeals) holding that there is no provision which allows one to reduce the salary income i.e. the sign in bonus. Aggrieved assessee went in appeal:

Held against the assessee that the sign in bonus addition does not require a deletion on examination of facts by Commissioner (Appeals).

Note: What would have been the case if the sign in bonus would have not been refunded with a compensatory payout by Deutsche bank, the very fact of a covenant existing for repaying it on termination voluntary or otherwise would have perhaps made it a contractual employment related payout thus only the net salary could have been taxed which is true like salary accrued but not received on real income principles. The fact of it refunded by the subsequent employer perhaps made it appear to be a benefit derived out of employment. It is the restitution which made it taxable thus.