The Assessee was an employee in the company. The Assessee received monetary benefits such as salary, compensation, gratuity and leave encashment under the Voluntary Retirement Scheme on closure of the company. The Assessee filed the original return of income, and subsequently the same was revised wherein the Assessee claimed exemption under section 10(10C) of the Act, apart from claiming exemption against Gratuity and Leave Encashment under section 10 as per Form 16. The Assessee also claimed rebate under section 89 on gratuity and VRS compensation. The AO passed the assessment order by allowing exemption under section 10(10C) of the Act and rejecting the claim under section 89 by holding that the Assessee is not entitled to both the exemption under section 10(10C) and benefit under section 89 of the Act. Being aggrieved, the appeal was filed before CIT(A). In the appellate proceedings, the Assessee challenged the disallowance of claim under section 89 and also raised a new claim that, the Assessee is entitled for the exemption under section 10(10B) instead of 10(10C) against VRS compensation. However, the CIT(A) did not allow any relief as claimed. Thus, being aggrieved by the order of the CIT(A), the appeal was preferred before the ITAT. The ITAT observed that, in the case of other employees, the CIT(A) has consistently allowed the claim of exemption under section 10(10B) of the Act. In case of some of the employees, the AO at the assessment level has allowed the claim of the Assessee. Thus, it is a classic case of unnecessary litigation which has left the Assessee l with no option but to seek necessary redressal. Further, this issue has been examined by the Hon’ble Madras High Court in the case of Hindustan Photo Film Workers decision dated 17/03/2017 in writ petition no. 18566 of 2015 and thereafter has attained finality in view of the dismissal of the SLP by the Hon’ble Supreme Court. Thus, the appeal of the Assessee was allowed by the ITAT. Tribunal also held that salary includes gratuity; therefore, relief is to be provided under section 89 in taking the net gratuity amount.   [AY. 2017-18]