TMI Blog2016 (3) TMI 282X X X X Extracts X X X X X X X X Extracts X X X X ..... different foreign countries and raised claim of their expenditure incurred therein. No doubt, the assessee may not be aware with the ultimate plan of travel of its employees, but at the time of settlement of the LTC/LFC bills, complete facts are available before the assessee as to where the employees have travelled, for which he has raised the claim; meaning thereby the assessee was aware of the fact that its employees have travelled in foreign countries, for which he is not entitled for exemption under section 10(5) of the Act. Thus, the payment made to its employees is chargeable to tax and in that situation, the assessee is under obligation to deduct TDS on such payment, but the assessee did not do so for the reasons best known to it. W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... V, JUDICIAL MEMBER AND SHRI. A. K. GARODIA, ACCOUNTANT MEMBER For The Appellant : Shri. Pradeep Mehrotra, Advocate For The Respondent : Shri. Amit Nigam, D.R. ORDER PER SUNIL KUMAR YADAV: These appeals are preferred by the assessee against the respective orders of the ld. CIT(A). Since common issues are involved in these appeals, these were heard together and are being disposed of through this consolidated order for the sake of convenience. We, however, prefer to reproduce the grounds raised in I.T.A. No. 138/LKW/2015 as under:- 1. That the Learned Commissioner of Income Tax (Appeal) has erred on facts and in law in holding that LTC paid to the employees involving foreign travel as well does not qualify for exemp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... place in India and restricted to the amount of expenses actually incurred for the purpose of such travel read with conditions as per rule 2B of the Income Tax Rule, 1962. The Assessing Officer accordingly issued notice under section 201(1)(/201(1A) of the Act to the assessee requiring to explain as to why TDS was not deducted on the amount of reimbursement of LFC. Since the said amount cannot be treated as exempt under section 10(5) of the Act, as a foreign destination was included in the journey, the assessee was asked to explain as to why he may not be treated as assessee in default for not deducting TDS on the said amount of LFC reimbursement. Since no reply was filed by the assessee, the Assessing Officer treated the assessee to be in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ras High court dated 16.2.2015 whereby the Hon ble Madras High Court has directed not to deduct TDS on the amount paid or reimbursed to the employee of the bank in respect of LTC/HTC availed where the employee has visited a foreign city/country irrespective of the fact whether the LFC bills were submitted and paid prior to 16.2.2015. Copy of this Circular is placed on record. The ld. counsel for the assessee has further contended that in the light of the Circular, the assessee should not be held to be in default for non-deduction of TDS on the amount of LFC to its employees. 6. The ld. D.R., on the other hand, has contended that as per provisions of section 10(5) of the Act, only that reimbursement of expenses, which were incurred on tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Court. Therefore, the assessee cannot take shelter of the aforesaid interim order of the Hon ble Madras High Court. 8. Having carefully examined the orders of the lower authorities in the light of the rival submissions and the documents placed on record, we find that as per provisions of section 10(5) of the Act, only that reimbursement of travel concession or assistance to an employee is exempted which was incurred for travel of the individual employee or his family members to any place in India. Nowhere in this clause it has been stated that even if the employee travels to foreign countries, exemption would be limited to the expenditure incurred to the last destination in India. For the sake of reference, we extract the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ultimate plan of travel of its employees, but at the time of settlement of the LTC/LFC bills, complete facts are available before the assessee as to where the employees have travelled, for which he has raised the claim; meaning thereby the assessee was aware of the fact that its employees have travelled in foreign countries, for which he is not entitled for exemption under section 10(5) of the Act. Thus, the payment made to its employees is chargeable to tax and in that situation, the assessee is under obligation to deduct TDS on such payment, but the assessee did not do so for the reasons best known to it. We have also carefully examined the Circular placed by the ld. counsel for the assessee during the course of hearing, in which a refere ..... X X X X Extracts X X X X X X X X Extracts X X X X
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