TMI Blog2017 (4) TMI 361X X X X Extracts X X X X X X X X Extracts X X X X ..... h provisions one has to see that the provisions do not become nugatory and/or otiose. Considering the provisions of Sections 115W, 115WA, 115WB(1) and 115WB(2) as they are, the CBDT has rightly clarified that with respect to the expenses incurred by the assessee / employer for the services / activities referred to in clause (A) to (P) of subsection (2) of Section 115WB, there shall be FBT, is absolutely just and proper and in consonance with the provisions of the Statute more particularly sections 115WA, 115WB and 115WC. The clarifications made by the CBDT in the impugned circular cannot be said to be contrary to the provisions of the Statute more particularly Sections 115W, 115WA, 115WB(1) and 115WB(2). Under the circumstances, the challenge to the impugned circular fails and it is held that the FBT is leviable on the expenses referred to in clauses (A) to (P) of subsection (2) of Section 115WB as they are deemed to be the fringe benefits deemed to have been provided by the employer to his employees. Under the circumstances, the petitions deserve to be dismissed and are, accordingly, dismissed. Estimation of FBT - Held that:- Fringe Benefit is required to be valued as per se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wances, telephone expenses, the Revenue has preferred the present Tax Appeal No.474/2014 with the following substantial questions of law. A. Whether the Appellate Tribunal has substantially erred in deleting the addition of ₹ 1.11 crores to the value of Fringe Benefit despite the fact that these expenses were deemed Fringe Benefits provides to employees as per the provisions of Section 115WB(2) Clause A to Q of the I.T. Act, 1961? B. Whether the Appellate Tribunal has not appreciated the fact that there was no question of estimation by the Assessing Officer since 20% of such expenses are to be treated as Fringe Benefits as per Section 115 WC(1) of the Act? [2.2] Feeling aggrieved and dissatisfied with the impugned common judgment and order dated 03.03.2014 passed by the learned Tribunal in ITA Nos.3086 to 3088/Ahd/10 for AY 200607, AY 200708 and 200809, by which the learned Tribunal has allowed the said appeals preferred by the respondent assessee Intas Pharmaceuticals Limited and has deleted the levy of the FBT levied by the AO confirmed by the learned CIT(A) on expenditure towards conference, sales promotion, conveyance, hotel boarding and lodging, repairs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commerce and Industries and another is treated as a lead matter. [4.0] The Finance Act, 2005 introduced a new levy, namely, FBT on the valuation of certain fringe benefits. The provisions relating to levy of this tax are contained in Chapter XIIH (Sections 115W to 115WL) of the Act. Sections 115W to 115WL of the Act are reproduced hereinafter. [4.1] The statement and objects to levy the FBT so stated at the time of introduction of new levy by Finance Act, 2005 are as under: 2.1 The taxation of perquisites or fringe benefits is justified both on grounds of equity and economic efficiency. When fringe benefits are undertaxed, it violates both horizontal and vertical equity. A taxpayer receiving his entire income in cash bears a higher tax burden in comparison to another taxpayer who receives his income partly in cash and partly in kind, thereby violating horizontal equity. Further, fringe benefits are generally provided to senior executives in the organization. Therefore, undertaxation of fringe benefits also violates vertical equity. It also discriminates between companies which can provide fringe benefits and those which cannot thereby adversely affecting market structure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d circular in the form of question answers. By the impugned circular the CBDT has clarified that the FBT is leviable on the expenses incurred by the employer in respect of entertainment; provision of hospitality; conference excluding the fee from participation by the employees in any conference; sales promotion including publicity but excluding specified expenditure on advertisement; conveyance, tour and travel (including foreign travel); use of hotel, boarding and lodging facilities; repair, running (including fuel) and maintenance of motor cars and the amount of depreciation thereon; maintenance of any accommodation in the nature of guest house other than accommodation used for trading purposes; festival celebrations; use of any other club facilities, gifts and scholarships etc. and consequently the FBT is being levied on the expenses incurred by the employer on the aforesaid. Hence, the petitioner Chamber of Commerce and others have preferred the present Special Civil Applications challenging the impugned circular issued by the CBDT and consequently to restrain the respondents from enforcing the impugned circular or applying the impugned circular to the employer who are made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated that the said benefits are either taxed in the hands of the employees themselves or the value of such benefit is subject to a FBT in the hands of the employer. It is submitted that it was stated that the rationale for levying FBT on the employer lies in the inherent difficulty of isolating the personal element where there is a collective enjoyment of such benefits and attributing the same directly to the employee. It is submitted that it was further stated that where the employer directly reimburses the employees for expenses incurred, it becomes difficult to collectively capture the true extent of the perquisite because of the problem of cash flow in the hands of the employer. [6.4] It is further submitted that even in the interview to the Economic Times on 02.03.2005, the Finance Minister assured that perquisites which are disguised as Fringe Benefits only will be taxed and no legitimate business expenditure will be taxed. It is submitted that a similar statement was made by Hon ble The Finance Minister while addressing Rajya Sabha on 05.05.2005 and it was made clear that only those expenditures which are otherwise really a perquisite or a Fringe Benefit, which has es ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid of the main section and cannot be contrary to the legislative intent. [6.10] It is further submitted by Shri Patel, learned Advocate appearing on behalf of the respective petitioners that as held by the Hon ble Supreme Court in the case of K.P. Varghese vs. Income Tax Officer Anr. reported in (1981) 131 ITR 597 (SC) , the speech made by the Mover of the Bill explaining the reason for the introduction of the Bill can certainly be referred to for the purpose of ascertaining the mischief sought to be remedied by the legislation and the object and purpose for which the legislation was enacted. [6.11] It is further submitted by Shri Patel, learned Advocate appearing on behalf of the respective petitioners that Section 115WB(2) gives an impression that even if the expenses mentioned in that section have no connection with the employees, Fringe Benefit shall be deemed to have been provided to employees on incurring of such expenses. It is submitted that that is how the CBDT circular interprets section 115WB(2). It is submitted that however, such an interpretation cannot be accepted. It is submitted that the charging Section 115WB(a) creates charge in respect to Fringe Bene ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the task of interpretation of statutory enactment shall not be a mechanical one. It is submitted that it is more than mere reading of mathematical formula. It is submitted that while interpreting any statute an attempt shall be made to discover the legitimate interest from the language used and the interpretation shall not be solely based on purely literal reading. It is submitted that it is further observed and held that plain literal interpretation of statutory provision, if it results in absurd and unreasonable consequence, not in consonance with legislative intent, it must be avoided. It is submitted that such avoidance is necessary to arrive at the obvious intention of the legislature and to produce rationale construction. It is further submitted that it is further observed and held by the Hon ble Supreme Court in the said decision that it is a well settled rule of construction that where the plain literal interpretation of a statutory provision produces a manifestly absurd and unjust result which could never have been intended by the legislature, the Court may modify the language used by the legislature or do some violence to it, so as to achieve the obvious intention of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n employeremployee relationship. It is held that there is a perquisite for levy of FBT. It is submitted that in the said decision the Bombay High Court confirming the order passed by the learned Tribunal quashed and set aside the levy of FBT on the expenses incurred by the assessee Company towards sales promotion expenses. [6.21] Shri Patel, learned Advocate appearing on behalf of the respective petitioners has also relied upon some of the decisions of the Tribunals taking the view that for the expenses incurred by the employer not relatable to the employee, the FBT is not leviable. Making above submissions and relying upon above decisions, it is requested to quash and set aside the impugned circular issued by the CBDT and consequently restrain the Revenue from levying FBT on the expenses incurred by the employer not relatable to the employees at all more particularly the expenses incurred for the purposes mentioned in clause (A) to (P) of section 115WB(2) of the Act. [7.0] Shri S.N. Soparkar, learned Senior Advocate appearing on behalf of the respective assessees employers has, in addition to the above submissions made by Shri Patel, learned Advocate appearing on behalf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the mischief and defect for which the common law did not provide Several perquisites which were disguised as Fringe Benefit escaped taxes when they were collectively enjoyed by the employees and where it was difficult to attribute benefit to particular employee. What remedy the parliament hath resolved and appointed to cure the disease of commonwealth Fringe Benefit that are collectively enjoyed by the employees and where it is difficult to attribute benefit to particular employee should now be taxed in the hands of the employer. True reason for remedy Only expenses attributable to Employees can be taxed and not other business expenses wholly unconnected with the employees. [7.4] It is further submitted by Shri Soparkar, learned Senior Advocate appearing on behalf of the respective assessees that section 115WC is a charging section. It is submitted that levy of any tax cannot go beyond the charging section. It is submitted that therefore considering section 115WC of the Act, the expenses which are to be incurred by the employers relatable to the employees only are sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubsections (1) and (2) operate in different fields. [8.2] It is submitted that any inference that subsection (2) is controlled by subsection (1) and any expenditure which is not a consideration for employment as mentioned under different heads of subsection (2) cannot be considered as Fringe Benefit, shall make most of the provisions of subsection (2) as redundant, otiose or meaningless. It is submitted that as per the catena of decisions of the Hon ble Supreme Court as well as this Court, a Statute should ordinarily be given purposive construction which will not result in an anomaly or absurdity. [8.3] It is submitted that a simple and plain meaning of subsection (2) of Section 115WB reveals that if the employer incurs any of the expenditure as mentioned under clauses (A) to (Q), though may or may not have been in consideration of the employment or for providing any benefit or incentive to the employees, but also for benefit to any third person, but in the course of business or profession, is deemed to have been provided by the employers to employees. It is submitted that with the aforesaid, scope has been expanded covering those expenses, which have been mentioned under s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ough does not relate to employee employer relationship, yet is deemed to be incurred by the employer on the employee so as to expand and cover the type of expenditure under the FBT. It is submitted that any other interpretation would make section 115WB(2) nugatory and/or redundant. [8.6] It is vehemently submitted by Shri Bhatt, learned Senior Advocate appearing on behalf of the Revenue that as language of section 115WB(1) (2) is very clear and unambiguous, the ordinary and natural meaning is to be given and the statute is to be interpreted literally. It is submitted that as observed by the Hon ble Supreme Court in catena of decisions it is the duty of the Court not to modify the language of the Act and if such meaning is clear and unambiguous, effect should be given to the provision of the statute whatever may be the consequence. It is submitted that therefore if section 115WB(2) is literally interpreted and it is read as it is, in that case, any expenditure mentioned under clauses (A) to (Q) of section 115WB(2) are treated as deemed Fringe Benefit and therefore, on such expenses the employer / assessee is liable to pay the FBT. [8.7] Now, so far as the submission made b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of statute there shall be a literal interpretation. The question with respect to read into the statutory provision or the purposive interpretation may come when the vires of provision is under challenge and/or when the language of the statute is ambiguous and/or when there is any doubt or lacuna or incompleteness in the language or construction of the statute. Otherwise the provision of the statute is required to be read as it is and it must be given a literal interpretation. In a given case where the vires of the provision of the statute is under challenge, to uphold the vires the Court may have purposive interpretation and/or read into the statutory provision. However, the same is permissible, when the plain, literal interpretation of a statutory provision produces a manifestly absurd and unjust result which can never have been intended by the legislature. In such a situation the Court may modify the language used by the legislature or even do some violence to it, so as to achieve the obvious intention of the legislature and produce a rationale construction. The Court may also in such a case read into the statutory provision a condition which, though not expressed is im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loyees); (b) any free or concessional ticket provided by the employer for private journeys of his employees or their family members; (c) any contribution by the employer to an approved superannuation fund for employees; and (d) any specified security or sweat equity shares allotted or transferred, directly or indirectly, by the employer free of cost or at concessional rate to his employees (including former employee or employees). Explanation.For the purposes of this clause, (i) specified security means the securities as defined in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956) and, where employees' stock option has been granted under any plan or scheme therefor, includes the securities offered under such plan or scheme; (ii) sweat equity shares means equity shares issued by a company to its employees or directors at a discount or for consideration other than cash for providing knowhow or making available rights in the nature of intellectual property rights or value additions, by whatever name called. (2) The fringe benefits shall be deemed to have been provided by the employer to his employees, if the employer h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent to any advertising agency for the purposes of clauses (i) to (v) above; (vii) being the expenditure on distribution of samples either free of cost or at concessional rate; and (viii) being the expenditure by way of payment to any person of repute for promoting the sale of goods or services of the business of the employer, shall not be considered as expenditure on sales promotion including publicity; (E) employees' welfare. Explanation.For the purposes of this clause, any expenditure incurred or payment made to (i) fulfil any statutory obligation; or (ii) mitigate occupational hazards; or (iii) provide first aid facilities in the hospital or dispensary run by the employer; or (iv) provide creche facility for the children of the employee; or (v) sponsor a sportsman, being an employee; or (vi) organise sports events for employees, shall not be considered as expenditure for employees' welfare; (F) conveyance; (G) use of hotel, boarding and lodging facilities; (H) repair, running (including fuel), maintenance of motor cars and the amount of depreciation thereon; (I) repair, running (including fuel) and maintenance of aircrafts and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the Assessing Officer shall, by an order in writing, make an assessment of the value of the fringe benefits paid or payable by the assessee, and determine the sum payable by him or refund of any amount due to him on the basis of such assessment. (4) Where a regular assessment under section 115WD(3) is made, (a) any tax or interest paid by the assessee under sub27 50 section (1) shall be deemed to have been paid towards such regular assessment (b) if no refund is due on regular assessment or the amount refunded under subsection (1) exceeds the amount refundable on regular assessment, the whole or the excess amount so refunded shall be deemed to be tax payable by the assessee and the provisions of this Act shall apply accordingly. s; (K) [***] (L) festival celebrations; (M) use of health club and similar facilities; (N) use of any other club facilities; (O) gifts; and* (P) scholarships; (Q) tour and travel (including foreign travel). (3) For the purposes of subsection (1), the privilege, service, facility or amenity does not include perquisites in respect of which tax is paid or payable by the employee or any benefit or amenity in the nature of free ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lause (c) of subsection (1); (aa) in the case of an employer engaged in the business of carriage of passengers or goods by aircraft, the value of fringe benefits for the purposes referred to in clause (B) of subsection (2) of section 115WB shall be five per cent instead of twenty per cent referred to in clause (c) of subsection (1); (ab) in the case of an employer engaged in the business of carriage of passengers or goods by ship, the value of fringe benefits for the purposes referred to in clause (B) of subsection (2) of section 115WB shall be five per cent instead of twenty per cent referred to in clause (c) of subsection (1); (b) in the case of an employer engaged in the business of construction, the value of fringe benefits for the purposes referred to in clause (F) of subsection (2) of section 115WB shall be five per cent instead of twenty per cent referred to in clause (c) of subsection (1); (c) in the case of an employer engaged in the business of manufacture or production of pharmaceuticals, the value of fringe benefits for the purposes referred to in clauses (F) and (G) of subsection (2) of section 115WB shall be five per cent instead of twenty per cent ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... July of the assessment year. (2) In the case of any employer who, in the opinion of the Assessing Officer, is responsible for paying fringe benefit tax under this Act and who has not furnished a return under subsection (1), the Assessing Officer may, after the due date, issue a notice to him and serve the same upon him, requiring him to furnish within thirty days from the date of service of the notice, the return in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed. (3) Any employer responsible for paying fringe benefit tax who has not furnished a return within the time allowed under ubsection (1) or within the time allowed under a notice issued under subsection (2), may furnish the return for any previous year, at any time before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment, whichever is earlier. (4) If any employer, having furnished a return under subsection (1), or in pursuance of a notice issued under subsection (2), discovers any omission or any wrong statement therein, he may furnish a revised return at any time before the expiry o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... athered, the Assessing Officer shall, by an order in writing, make an assessment of the value of the fringe benefits paid or payable by the assessee, and determine the sum payable by him or refund of any amount due to him on the basis of such assessment. (4) Where a regular assessment under section 115WD(3) is made, (a) any tax or interest paid by the assessee under subsection (1) shall be deemed to have been paid towards such regular assessment (b) if no refund is due on regular assessment or the amount refunded under subsection (1) exceeds the amount refundable on regular assessment, the whole or the excess amount so refunded shall be deemed to be tax payable by the assessee and the provisions of this Act shall apply accordingly. Best judgment assessed. Section 115WF. If any person, being an employer (a) fails to make the return required under subsection (1) of section 115WD and has not made a return under subsection (3) or a revised return under subsection (4) of that section, or (b) fails to comply with all the terms of a notice issued under subsection (2) of section 115WD or fails to comply with a direction issued under subsection (2A) of section 142, o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e benefits in respect of which he is assessable under this Chapter during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed, and the provisions of this Chapter shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 115WD. (2) The Assessing Officer shall, before issuing any notice under this section, record his reasons for doing so. (3) No notice under subsection (1) shall be issued for the relevant assessment year after the expiry of six years from the end of the relevant assessment year. Explanation.-In determining fringe benefits chargeable to tax which have escaped assessment for the purposes of this subsection, the provisions of the Explanation to section 115WG shall apply as they apply for the purposes of that section. (4) In a case where an assessment under subsection (3) of section 115WE or section 115WG has been made for the relevant assessment year, no notice shall be issued under subsection (1) by an Assessing Officer, after the expiry of four years from the end of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the period commencing on the date immediately following the due date, and,- (a) where the return is furnished after the due date, ending on the date of furnishing of the return; or (b) where no return has been furnished, ending on the date of completion of the assessment under section 115WF, on the amount of the tax on the value of fringe benefits as determined under subsection (1) of section 115WE or regular assessment as reduced by the advance tax paid under section 115WJ. (2) The provisions contained in subsections (2) to (4) of section 234A shall, so far as may be, apply to this section. Section 115WKA. Recovery of fringe benefit tax by the employer from the employee . -Notwithstanding anything contained in any agreement or scheme under which any specified security or sweat equity shares referred to in clause ( d ) of subsection (1) of section 115WB has been allotted or transferred, directly or indirectly, by the employer on or after the 1st day of April, 2007, it shall be lawful for the employer to vary the agreement or scheme under which such specified security or sweat equity shares has been allotted or transferred so as to recover from the employee the frin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion for any employment is significant and section 115WB(1), inasmuch as the benefits by way of clause (a) to (d) listed therein are directed to its employees (including former employee or employees). Section 115WB is an interpretation section. It is in two parts. It provides for a direct meaning under section 115WB(1). It also has an expanded meaning. The expanded meaning of the said provision is contained in subsection (2). Whereas subsection (1) takes within its sweep any consideration for employment, inter alia, by way of privilege service, facility or amenity directly or indirectly, subsection (2) thereof expands the said definition stating as to what the Fringe Benefit would be deemed to have been provided. At this stage the observations made by the Hon ble Supreme Court in the case of R B Falcon (A) PTY Ltd. (Supra) is required to be considered. The provision of FBTR more particularly section 115WA and 115WB fell for consideration before the Hon ble Supreme Court in the case of R B Falcon (A) PTY Ltd. (Supra). While considering the provisions of FBT in Chapter XIIH and the very CBDT Circular which has been challenged in the present petitions, the Hon ble Supreme Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n extension of subsection (1), Mr. Ganesh may be right but we must notice that Section 115WA provides for imposition of tax on expenditure incurred by the employer or providing its employees certain benefits. Those benefits which are directly provided are contained in subsection (1). Some other benefits, however, which the employer provides to the employees by incurring any expenditure or making any payment for the purpose enumerated therein in the course of his business or profession, irrespective of the fact as to whether any such activity would be carried on a regular basis or not, e.g., entertainment would, by reason of the legal fiction created, also be deemed to have been provided by the employer for the purpose of subsection (2). Whereas subsection (1) envisages any amount paid to the employee by way of consideration for employment, what would be the limits thereof are only enumerated in subSection (2). We, therefore, are of the opinion that subsections (1) and (2), having regard to the provisions of Section 115WA as also subsection (3) of Section 115WB, must be held to be operating in different fields. 15. We must test the submissions of Mr. Ganesh from another angle. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in a different manner; in other respects . As a general rule, 'otherwise' when following an enumeration, should receive an ejusdem generis interpretation (per CLEASBY, B. Monck v. Hilton, 46 LJMC 167, The words or otherwise , in law, when used as a general phrase following an enumeration of particulars, are commonly interpreted in a restricted sense, as referring to such other matters as a are kindred to the classes before mentioned, (Cent. Dict.). 17. It is now a well settled principle of law that a statute should ordinarily be given a purposive construction New India Assurance Company Ltd. vs. Nusli Neville Wadia and Anr. 2007 (14) SCALE 556; Tanna and Modi vs. CIT, Mumbai XXV and Ors. 2007 (8) SCALE 511 and Udai Singh Dagar and Ors. vs. Union of India (UOI) 2007 (7) SCALE 278. 18. The Parliament, in introducing the concept of fringe benefits, was clear in its mind in so for as on the one hand it avoided imposition of double taxation, i.e., tax both on the hands of the employees and employers; on the other, it intended to bring succour to the employers offering some privilege, service, facility or amenity which was otherwise thought to be necessary or expedi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the word deemed . As observed by the Hon ble Supreme Court in the case of R B Falcon (A) PTY Ltd. (Supra), subsection (2) of section 115WB is independent and subsections (1) and (2) of section 115WB operate in different fields. As observed by the Hon ble Supreme Court in the said decision, by reason of legal fiction created the services provided mentioned in subsection (a) to (p) in subsection (2) of section 115WB, the said benefits are deemed to have been provided by the employer to the employees. At this stage it is required to be noted that under Section 115WB(1) the expenses incurred by the employer, in consideration for employment, for the benefits, services etc. as mentioned under Clause (a) to (d) of his employees are liable to be subjected to the FBT. The words consideration for employment , employer , employee , employees have been repeatedly mentioned not only in the main section (Section 115WA) but also in every clause of section 115WB(1). On perusal of entire section 115WB(2) it reveals that wherever the Parliament has intention to include the expenditure from which any benefit is derived out to the employees, the word employees has been specifically used ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax is payable by such an employer on his total income computed in accordance with the provisions of the Act. Thus, as per section 115WA, FBT is liable to be paid in respect of the Fringe Benefit provided or deemed to have been provided by an employer to his employees. What can be said to be the fringe benefits is defined and/or explained under subsection (1) of section 115WB. Section 115WB, as observed hereinabove, is in two parts. Subsection (1) of section 115WB can be said to be with respect to the direct fringe benefits provided by the employer to his employees. Subsection (2) of section 115WB can be said to be with respect to fringe benefits deemed to have been provided by an employer. On fair reading of subsection (2) of section 115WB if the employer has incurred any expense on, or made any payment for the purposes mentioned in section 115WB(2)(A) to 115WB(2)(P), the same can be said to be fringe benefits deemed to have been provided by the employer to the employees. Under the circumstances with respect to any expenses incurred by the employer on, or by the payment made by the employer for the purposes mentioned in any of the provisions of Section 115WB(2)(A) to 115WB(2)(P) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he needful? [12.1] In Commissioner of Income Tax, Madras v. R.SV. Sr. Arunachalam Chettiar, a three-Judge Bench of the Hon ble Supreme Court, inter alia, observed inparagraph 13 (at pgs. 122021) of the Judgment, equity is out of place in tax law; a particular income is either exigible to tax under the taxing statute or it is not. In the Income Tax Officer, Tuticorin v. T.S. Devinatha Nadar etc., this Court in paragraph 30 (at pg. 635) of the Judgment it is observed as follows : 30. From the foregoing decisions it is clear that the consideration whether a levy is just or unjust, whether it is equitable or not, a consideration which appears to have greatly weighed with the majority, is wholly irrelevant in considering the validity of a levy. The courts have repeatedly observed that there is no equity in a tax. The observations of Lord Hatherley, L.C. in (1869) 4 Ch. A 735. In fact we must look to the general scope and purview of the statute, and at the remedy sought to be applied, and consider what was the former state of the law, and what it was that the legislature contemplated, were made while construing, a nontaxing statute. The said rule has only a limited applicatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... visions of the Statute more particularly Sections 115W, 115WA, 115WB(1) and 115WB(2). Under the circumstances, the challenge to the impugned circular fails and it is held that the FBT is leviable on the expenses referred to in clauses (A) to (P) of subsection (2) of Section 115WB as they are deemed to be the fringe benefits deemed to have been provided by the employer to his employees. Under the circumstances, the petitions deserve to be dismissed and are, accordingly, dismissed. [14.0] Now, we shall deal with respective Tax Appeals preferred by the Revenue. Tax Appeal No.474/2014 [14.1] That by the impugned judgment and order the learned Tribunal has deleted the addition of ₹ 1.11 Crores to the value of fringe benefit. On considering the impugned judgment and order passed by the learned Tribunal it appears that the nature of the benefit provided by the employer were as under: 1. Sales Promotion 2. Conveyance, Tour and Travels 3. Misc. Repairs and Maintenance 4. Other allowances 5. Telephone Expenses [14.2] In view of our above decision and as it is held that on the expenses, referred to in clauses (A) to (P) of subsection (2) of Section 115WB, i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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