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2013 (9) TMI 239 - AT - Income TaxTDS u/s 192 - TDS on LTA and Medical reimbursement - Exemption u/s 10(5) - fulfillment of conditions of section 17(2) - - Held that:- exemption in respect of medical expenditure and leave travel is considered after collecting and verifying the details and evidence furnished by the employees. Policies and controls are in force to ensure that the requirements of rule 2B are fulfilled. The details filed before the TDS officer explains the policies adopted to fulfill the requirements of rule 2B and the process adopted in considering the exemption under section 10(5) and proviso to section 17(2). Honest and bona fide estimate of taxable salary is made in the process of deducting tax at source under section 192. Every effort is made by the assessee to comply with the requirements of section 192. The assessee is not benefited by allowing employees to claim exemption - The AO does not dispute non-fulfillment of conditions for allowing exemption u/s. 10(5) of the Act or proviso (iv) to Sec.17(2) of the Act. The liability of the person deducting tax at source cannot be greater than the liability of the person on whose behalf tax at source is deducted. The AO has ignored this aspect and has proceeded to pass the order u/s.201(1) and 201(1A) of the Act. His order was rightly held to be unsustainable by the CIT(A) - Following decision of Infosys BPO (2013 (9) TMI 205 - ITAT BANGALORE), Decided against Revenue. Salaries - TDS on Free meal coupons u/s 192 – taxability as perquisite within the rule 3(7) (iii) – deduction of tax at source - coupons were not utilized by employee for purchasing meals at an eating joints but were mis-used to purchase grocery items, cosmetics items, etc., from shops/super stores – Held that employer is not expected to presume misuse of coupons to warrant deduction of tax at source – further, conveyance allowance in respect of vehicles owned by employees cannot be treated as perquisite - expenditure incurred on disbursement of meal coupons by the employer to the employees did not attract the provisions of s. 192 - Decided against Revenue.
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