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2010 (5) TMI 840 - AT - Income TaxFringe benefit tax - vehicle hire expenses for arriving at value of FBT - DR submitted that the facility of conveyance given to the employees is covered by clause (F) of sub-section 2 of section 115WB and there is no discretion left to the AO in making any exception to the rule - HELD THAT:- What is intended to be taxed is a benefit attributable to employees collectively but the transport services for workers and staff are to be outside the tax net. Any form of conveyance provided by the employer to the employees would be fringe benefits, taxable in the hands of the employer. During the previous year relevant to asst. year 2006-07, the clause (F) included the words "conveyance, tour and travel (including foreign travel)", while the words "tour and travel (including foreign travel)" were omitted by Finance Act of 2006 w.e.f. 1/4/2007 and has been inserted into clause (Q) w.e.f. 1/4/2007; therefore, in the relevant asst. year, the words "conveyance, tour and travel (including foreign travel)" have to be read together. In the case before us, items 1, 2 and 3 considered by the CIT(A) are for the purposes of carrying on the business activities of the assessee company by the agencies of the assessee company and it is only item 4, which is spent on the employees for attending the meetings, inspections and other official functions. From the reading of the provisions of section 115WB(2), it is clear that the benefits given to an employee directly or indirectly only would be taxable under Chapter XII-H. As rightly pointed out by the CIT(A), the other expenditure is incurred for agencies other than the employees, who are outside the scope of the provisions of section 115WB(2). Therefore, we do not see any reason to interfere with the order of the CIT(A). In the result, the appeal filed by the revenue is dismissed.
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