2015 (9) TMI 1396 - HC - Income Tax

Applicability of section 115WB - Fringe Benefit Tax - ITAT held that Fringe Benefits cannot arise when the expenditure is incurred on non-employees - Held that - Tribunal has allowed the respondent s appeal by following its decision in case of Kotak Mahindra Old Mutual Life Insurance Ltd (2011 (11) TMI 497 - ITAT MUMBAI ) for Assessment year 2006-07 and restored the issue to the Assessing Officer for fresh determination. Mr.Kotangale learned counsel for the revenue very fairly states that the appeal filed from the order of the Tribunal in case of Kotak Mahindra Old Mutual Life Insurance Ltd (2015 (10) TMI 82 - BOMBAY HIGH COURT ) by the revenue to this Court being Income Tax Appeal No.674 of 2012 was dismissed by an order dated 22nd August 2014. -No substantial question of law. - Decided against revenue

Summary

Issues:
1. Interpretation of provisions related to Fringe Benefits under the Income Tax Act, 1961.

Analysis:

The High Court of Bombay heard three appeals where the revenue challenged the order of the Income Tax Appellate Tribunal regarding the assessment years 2006-07 and 2007-08 for M/s Kotak Mahindra Bank Ltd. The main contention raised by the revenue was related to the treatment of Fringe Benefits under the Income Tax Act, specifically focusing on the interpretation of Section 115WB(2) in relation to Section 115JB(1). The revenue questioned whether Fringe Benefits could arise when expenses were incurred on non-employees and if certain expenses mentioned in Section 115WB(2) could be excluded from the valuation of fringe benefits if not incurred for employees. The Tribunal had allowed the respondent's appeal based on a previous decision and directed the Assessing Officer to re-examine the issue. The revenue acknowledged a previous dismissal of a similar appeal by the High Court.

The Court, after considering the arguments, held that the questions raised did not give rise to any substantial question of law. Consequently, the Assessing Officer was instructed to review the issue again and make a decision in accordance with the law. As a result, the proposed questions were not entertained, and all three appeals were dismissed without any order as to costs.