TMI Blog2012 (5) TMI 718X X X X Extracts X X X X X X X X Extracts X X X X ..... owing two grounds: 1. That on the facts and in the circumstances of the case, Ld. CIT(A)-IV, Kolkata has erred in law in allowing the claim of the assessee as to assessment u/s. 115WE(3) of the value of Fringe Benefit on the basis of 40% of the expenses incurred under the specified heads without appreciating the fact that fringe benefit is not dependent on the income tax. 4. We have heard rival submissions and gone through facts and circumstances of the case. We find that the CIT(A) relying on assessment year 2006-07 in Appeal No.182/CIT(A)/08-09 dated 10.11.2009 on his own order has held that for the purpose of assessing value of fringe benefit u/s. 115WE(3) only 40% of the expenses incurred under specified heads can be taken into account. For this, he allowed the claim of assessee. At the outset, before us the Ld. DR relied on ITAT s decision in ITA No.2093/K/2010 in assessee s own case for Assessment Year 2006-07 dated 06.05.2011, wherein the Tribunal has allowed the claim of assessee by observing as under: 10. The basic issue in this appeal is as to whether Rule 8 of Income Tax Rules applies to compute taxable value of fringe benefit in the case of assessee-company, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to be considered as 40% for the purpose of Income Tax Act; and 60% as agricultural income which is outside the purview of Income Tax Act. However, in the case of fringe benefits tax, it is leviable as per provisions contained in Chapter XII-H of the Income Tax Act. Fringe Benefit Tax, is basically the tax on the expenses incurred by the assessee to provide certain privilege, facility or amenities to its employees. Fringe Benefit Tax is payable even if no tax is payable by an employer. Therefore, FBT is not linked with the income of an employer but it is with reference to the expenditure incurred by the employer on the benefits/ privileges provided to its employees. Hence, we find merit in the contention of the ld. D.R. that there is no similarity between the provision of section 115WA, vis- -vis section 115- O of the Income Tax Act. In view of the above, we are of the considered view that the decision of the Hon ble Apex Court in the case of Doom Dooma India Ltd. (supra) relied on by the ld. A.R. is not relevant to the issue before us. On the other hand, the similar issue has been considered by the ITAT, Kolkata Bench vide its order dated 07.01.2011 (supra) and we consider it pru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ering the fact that the expenses ofRs.43,26,760/- does not fall under clause 115WB(2)(Q). 6. Brief facts are that assessee incurred an amount of ₹ 2,32,78,227/- on account of foreign tour and travel expenses including other expenses of ₹ 34,23,299/-. The assessee also incurred an expenditure of ₹ 43,26,760/- on account of other expenses in connection with foreign tours and travelling. The Assessing Officer considering the same as part of foreign tour and travel incurred on account of cost of stay, local conveyance etc. considered the value of fringe benefit @ 20% instead of 5% for the purpose of fringe benefit tax. Aggrieved, assessee preferred appeal before CIT(A), who allowed the claim of assessee by giving following finding in para 7 of his appellate order: 7. I have carefully considered the submissions of the A/Rs and have perused the applicable provisions of Sec. 115 WB(2). Sub-sec.(2) contains various clauses in which heads of expenses are enumerated. The said heads of expenses inter-alia includes Clause (A) for entertainment, Clause (F) for conveyance, Clause (G) for use of hotel, boarding lodging facilities, Clause (B) for provision of hospitalit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... more than one day at a place other than the place of his residence and therefore expenditure on lodging boarding at the places travelled is a necessary concomitant of the travel expenditure. In case a person undertakes tour travel for business purposes, it is expected of him to incur the expenses on lodging boarding as also on the local conveyance. In my considered opinion, tour travel expenses therefore necessarily include expenditure on stay of hotel or lodging boarding facilities and also several other expenses as may be necessary for completing the tour for business purposes. By using the purposive approach; all expenses incurred in the course of for the purpose of travel tour undertaken for business purposes need to be considered as tour travel expenses for the purpose of Clause (Q). I agree with the A/RS submissions that when there were restrictions on allowability of travelling expenses, Rule 6D imposed statutory limit on the quantum of travel expenditure which could be allowed u/s 37(1). Rule 6D clarified that all expenses incurred including hotel expenses, in connection with travel undertaken were to be considered as travelling expenses and amount exceeding ..... X X X X Extracts X X X X X X X X Extracts X X X X
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