TMI Blog2010 (12) TMI 605X X X X Extracts X X X X X X X X Extracts X X X X ..... e a certain specified amount only is liable to be taxed in the hands of the employee - Decided in favour of the assessee - ITA No. 840/Mum/2010; - - - Dated:- 3-12-2010 - J. Sudhakar Reddy, Vijay Pal Rao, JJ. Sonalee Godbole for the Appellant D. Songate for the Respondent ORDER J. Sudhakar Reddy, Accountant Member:- 1. This is an appeal filed by the assessee directed against the order of the CIT(A)-21, Mumbai dt. 27th Nov., 2009 for the asst. yr. 2006-07, wherein the CIT(A) has confirmed the order passed by the AO under s. 115WE(3) of the Act and assessed the value of fringe benefit, by making an addition on account of medical reimbursement. The sole ground of appeal reads as follows:- "The learned CIT( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which defines 'salary' and s. 17(2) which defines 'perquisite' with specific reference to sub-cl. (v) of the proviso. She submitted that the above reimbursement is a perquisite as per s. 17(2) proviso (v) and submitted that the value of the perquisite in the case of employee is zero. She drew attention of the Bench to sub-s. (3) of s. 115WB and submitted that perquisites in respect of tax which is paid or payable by the employee, cannot be included in the term 'perquisite'. She referred to the Medical Benefit Scheme of the assessee company and pointed out that for availing the benefit under the IT Act, employees can submit medical bills. She submitted that a flat amount by way of medical advance, is being paid through salary of every month. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ery month. The amount paid for the Vice Presidents/General Managers/Dy. General Managers etc. is Rs. 1,250 per month. Wherever the employees submitted medical bills for domiciliary treatment or for general check-up, every three months, benefit of proviso (v) to s. 17(2) could be availed. Now we examine the exemption in the proviso cl. (v) of s. 17(2) of the Act. Sec. 17(1)(iv) states that "salary" includes perquisites. Sec. 17(2) proviso (v) reads as follows:- "(v) any sum paid by the employer in respect of any expenditure actually incurred by the employee on his medical treatment or treatment of any member of his family [other than the treatment referred to in cls. (i) and (ii)]; so, however, that such sum does not exceed fifteen thous ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in (2005) 194 Taxman 1 : (2005) 273 ITR (St) 25, at p. 56, it is observed as follows:- "I have looked into the present system of taxing perquisites and I have found that many perquisites are disguised as fringe benefits, and escape tax. Neither the employer nor the employee pays any tax on these benefits which are certainly of considerable material value. At present where the benefits are fully attributable to the employee they are taxed in the hands of the employee; that position will continue. In addition, I now propose that where the benefits are usually enjoyed collectively by the employees and cannot be attributed to individual employees, they shall be taxed in the hands of the employer." (Emphasis, italicized in print, ours). ..... X X X X Extracts X X X X X X X X Extracts X X X X
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