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2019 (6) TMI 1177 - AT - Income TaxDetermination of value of fringe benefit - addition u/s 115WB(2)(E) of the Act denying the claim of uniform allowance - HELD THAT:- Assessee itself admitted in its fringe benefit return, the value of expenses liable to fringe benefit tax. Before the CIT(A) vide its submissions dated 09.11.2015 stated that the assessee inadvertently considered the value of expenses relating to uniform was considered as chargeable expenditure under the broad head “Workmen & Staff Welfare Expenses”. The wearing of uniform is out of compulsion arising from employment of the assessee and it is not an option and claimed the expenses incurred for staff uniform shall be excluded from chargeable expenditure under the head “Employees Welfare”. CIT(A) opined that the said clothes were not protective ones and they are not uniforms and not compulsory uniform under the statute. We find that the employees uniforms have traditionally been used as a functional necessity. It is noted from the record that the assessee assumed the financial responsibility for supplying and maintaining the freshly cleaned clothing to the employees for wearing to work each day. Though they are personalized uniforms provided they are not available for employees’ personal use. The uniforms that are put on by the employees when they arrive at work and were taken off at the end of work. The said uniforms, it appears laundered and maintained by the assessee. It is clear that the said clothing (uniforms) are not available for general or personal wear of the employees and when the clothing is not actually used for general or personal wear, in our opinion, are not taxable under fringe benefits. There was no welfare appended to the employees of the assessee by providing uniforms. CBDT passed Circular No.8/2005 wherein it clarified to a frequently asked question. At question no.74, it was asked whether MBT is payable on expenditure incurred on providing shoes or uniform or equipments to the employees or for the purposes of reimbursement of washing charges. It was clarified to the question above that any expenditure incurred for meeting the employers statutory obligation under the Employment Standing Orders Act 1946 fall within the scope of the exclusion in the Explanation to Clause E of sub-Section 2 of Section 115WB. Therefore it is clear from above answer that the expenditure incurred on providing safety shoes or uniforms or equipments to the employees or incurred for the purposes of reimbursement of washing charges are exempted from FBT to the extent of such expenditure is incurred to meet such statutory obligation. In the present case, we find that there was no discussion by the Assessing Officer in detail in respect of the claim of the assessee under fringe benefit tax - we deem it proper to remand the matter to the file of Assessing Officer to examine the standing orders relating to assessee and assessee shall provide every detail in respect of its claim before the AO. AO considering the relevant evidence and pass order in accordance with law. Ground raised by the assessee is allowed for statistical purposes.
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