TMI Blog2016 (8) TMI 359X X X X Extracts X X X X X X X X Extracts X X X X ..... mmissioner of Income Tax (Appeals) erred in law and on facts has dismissed the ground relating to the charging interest under section 115WJ of the Income Tax Act, 1961 on the assessed tax liability. 3.0 The learned Commissioner of Income Tax (Appeals) erred in law and on facts has dismissed the relating to the initiation of penalty proceedings under section 271(l)(d) of the Income Tax Act, 1961 for the alleged concealment and/or furnishing of inaccurate particulars of income. 4.0 The appellant craves leave to add to, alter, delete or modify any of the grounds of appeal either before or at the time of hearing of this appeal. 2. Briefly stated facts of the case as culled out from the records are that the assessee is a limited company engaged in the business of distribution of electricity. During the course of assessment proceedings u/s 115WE(3) of the Act it was observed by ld. Assessing Officer that value of Fringe Benefit Tax (FBT) under chapter XII-H of the Act was shown at Rs.NIL. However, in the Tax Audit Report u/s 44AB of the Act, auditors have reported the FBT value at ₹ 2,17,98,200/- and FBT payable thereon at ₹ 74,09,208/- When the question was raised b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ployment and that the genuine business Expenditure as well as in relation to persons who are not employees are out of the preview of FST. 3. The above reply of the assessee was not acceptable to the ld. Assessing Officer and assessment was completed by taking the value of FBT at ₹ 2,17,98,200/- taking the firm basis of Tax Audit Report. 4. Appeal before ld. CIT(A) could not bring any relief to the assessee and the appeal was dismissed by ld. CIT(A) by observing as under :- 6. .1 have considered the matter. Auditors appointed by the appellant reported fringe benefits as per provisions of Act at ₹ 2,17,98,200/-. In other words, these are taxable fringe benefits as per auditors by applying the provisions of Income-tax Act as they stand. Gujarat High Court in the said writ petition has not yet decided the matter substantively and has only granted that the fringe benefit tax be deposited in a separate account. Appellant has availed of such interim relief, even though as per AO, it is falling under Category-1, i.e. cases covered under provisions of FBT. Appellant has not made any attempt to demonstrate that it falls under Category 2 or 3 of cases for which interim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under :- 5. During the course of assessment proceedings, Assessing Officer noticed that the value of Fringe Benefit Tax (FBT) was declared at Rs. Nil by the assessee but in the tax audit report filed under Section 44AB of the Act, the value of fringe benefit was stated at ₹ 2,87,55,560/-. The Assessee was asked to clarify the discrepancy and justify its explanation. Assessee interalia submitted that in view of the judgment of Hon. Gujarat High Court in the case of Gujarat Chamber of Commerce and Industries vs. Union of India delivered on 18,10,2005, Assessee is not liable to pay FBT and therefore value of FBT was declared at Rs. Nil in the return. Assessing Officer did not accept the contention of the Assessee. He was of the view that the Assessee was liable to pay FBT on the value of fringe benefit under the provisions of chapter XII-H of the IT Act. He accordingly held as under: 3. Contentions raised by the assessee have been duly considered by me in the light of judgment (supra) of Hon. Gujarat High Court, it is very interesting to note that in the case before Hon. High Court of Gujarat, Hon. High Court was concerned with the issue of applicability of provisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I to Form No. 3CD has duly discharged his onus by quantifying and reporting the value of FB, despite the interim order of the Hon. High Court. This also leads to the conclusion that the interim relief benefit of the order of the Hon. High Court are not extended to the facts of the assessee. 6. Aggrieved by the order of Assessing Officer, Assessee carried the matter before CIT(A). CIT(A) upheld the order of Assessing Officer by holding as under: 4.6 On a combined reading of the speech of the Finance Minister, the Notes on Clauses and the Explanatory Memorandum (Circular No. 8 dt. 29.8.2005), it is evident that the FBT was introduced in order to tax the benefits which could not be brought within the scope of perquisite . This includes cases where the benefits are collectively enjoyed by the employees and cannot be attributed to any individual employee. Of course, where the benefit is enjoyed by a person who is not an employee, no FBT can be levied. However, it is for the assessee to show that the benefit was enjoyed by non-employees. The appellant has argued that even if the benefit was enjoyed by its employees, if the expenditure was incurred for the purposes of the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cheduled bank. We further find that the Assessing Officer has considered the Assessee to be covered in the category 1 of the Assessees who were covered by the provisions of FBT in terms of the decision of Hon. Gujarat High Court (supra). Before us, the learned A.R. could not controvert the findings of Assessing Officer and CIT(A) by bringing any contrary material on record. In view of the aforesaid facts, we find no reason to interfere with the order of CIT(A) and thus this ground of the Assessee is dismissed. 10. We observe that the facts of the case before us are similar to the facts dealt by the co-ordinate bench in Gujarat Energy Transmission Corpn. Ltd. (supra) and respectfully following the above decision of the co-ordinate bench, we are of the view that as the issue in this appeal is covered by the decision of Hon. Gujarat High Court in the case of Gujarat Chamber of Commerce Indus. Vs. Union of India and, therefore, assessee is covered under the under the provisions of Chapter XII-H of the I.T. Act and is liable for paying FBT. Accordingly, no interference is called for in the order of ld. CIT(A) and assessee s appeal is dismissed. 11. In the result, assessee s a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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