TMI Blog2014 (7) TMI 906X X X X Extracts X X X X X X X X Extracts X X X X ..... t u/s. 115WE(1), the reopening of the assessment cannot be made unless there is some new tangible material evidence to support the reopening of the assessment - the notice issued u/s. 115WG is set aside – Decided in favour of assessee. - ITA No.2656/Mum/2013 - - - Dated:- 23-7-2014 - D Manmohan And N K Billaiya, JJ. For the Appellant : Shri Farrokh Irani For the Respondent : Shri Sambit Mishra ORDER :- PER : N K Billaiya This appeal by the assessee is directed against the order of the Ld. CIT(A)-4, Mumbai dt.23.1.2013 pertaining to A.Y. 2008-09. 2. The grievances of the assessee read as under: GROUND NO.1 - Invalid Re-Assessment Proceedings 1. The Commissioner of Income tax (Appeals)-4 ( hereinafter referred as to the CIT(A) ) erred in confirming the reassessment proceedings initiated u/s 115WG of the Income tax Act, 1961 ( the Act ) by the Assessing Officer. 2. He failed to appreciate and ought to have held that: a. The entire reopening proceedings u/s 148 are bad in law b. All material facts regarding the FBT were truly and fully disclosed in the Income tax Return and in Tax Audit Report. c. No fresh mater ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pe of FBT. GROUND NO.7 - Travelling Expenses (Hotel Lodging Boarding) 1. The CIT(A) erred in holding that expenditure of ₹ 4,89,08,354 incurred by the Appellant on travel was liable to the levy of Fringe Benefit Tax as this expenses did not result in any benefit to the employees. 2. In the alternative and without prejudice to the above the benefit, if any, was not collective in nature and therefore did not fall within the scope of FBT. 3. With ground No. 1 the assessee claims that the entire reopening proceedings initiated u/s. 115WG of the Act are bad in law as no fresh material has been brought on record by the AO and the assessment has been reopened based on the same facts which were available on record. 4. The assessee is in the business of banking. The original return was filed on 299.2008 declaring a value of Fringe Benefit at ₹ 33,65,98,960/-. The said return was processed u/s. 115 WE(1) of the Act. Subsequently, the assessment proceedings were reopened u/s. 115 WG of the Act. The reasons for the reopening of the assessment read as under: The assessee has filed return of Fringe Benefit u/s 115WD on 29.09.2008 declaring value ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earlier years in assessee 's own case and the Ld CIT(A) vide his order for Assessment year 2006-07 has treated these expenses (except office telephone landline expenses and conveyance an car hire charges) as being liable to FBT tax. In view of the above provisions, expenditure amounting to ₹ 47,11,61,293/- (as per details below) has not been considered in arriving at the value of Fringe Benefit. S.No. Nature expenses Expenditure incurred (Rs.) % of Fringe Benefit Value of Fringle Benefit (Rs.) 1. Conference Meeting 87,284,455 20% 17,456,891 2. Business promotion Gift expenses 84,552,043 20% 16,910,400 3. Telephone-Mobile Exps 70,920,891 20% 14,184,178 4. Travel Exps. Domestic Foreign fare 179,495,549 5% 8,974,777 5. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. The Ld. Counsel further supported his claim by the Third Member decision of the Tribunal, Mumbai Bench in the case of Telco Dadajee Dhackjee Ltd. in ITA No. 4613/M/05. 8. The Ld. Departmental Representative supported the findings of the authorities below and relied upon the decision of the Hon'ble Allahabad High Court in the case of EMA India ltd. Vs ACIT 226 CTR 659. 9. We have carefully considered the rival submissions and perused the orders of the lower authorities and the decisions relied upon by the rival parties. It is not in dispute that the return was processed u/s. 115WE(1) of the Act. The return was accompanied by statutory report wherein it was specifically mentioned that the assessee has not considered the expenses on account of conference and meeting, business promotion Telephone-mobile expenses, Travel expenses, lodging and boarding expenses for FBT. It was also made very clear in the original return itself in the statutory audit report that these expenses have not been considered for the levy of FBT because they are legitimate business expenditure and not pertaining to welfare of employees and hence not liable to FBT u/s. 115WA of the Act. It is not in d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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