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TMI Blog2018 (1) TMI 75X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.12.2010 for the Assessment Year 2008-09. 2. The only issue to be decided in this appeal is as to whether the ld CITA was justified in confirming the addition of Rs. 1,24,574/- being 10% of overall expenses incurred by the assessee through credit card on behalf of the employer, in the facts and circumstances of the case. 3. The brief facts of this issue is that the assessee is an individual and a wholetime director of M/s Govind Steel Co. Ltd and is mainly looking after the matters relating to production, import of raw materials and export sales of finished goods of the company . In this process, he had to travel abroad for the export business of the company. The company had authorized the assessee to incur expenditure for and on behalf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers agitated in appeal. In effect there is only one matter to adjudicate, being that whether in the facts and circumstances of the case, the AO was correct in holding that the expenditures/payments made through the credit card by the employee on behalf of the employer were of personal nature and whether the Employer-Company had met the assessee's obligation requiring certain payments to be made, and therefore, the same was taxable as perquisites in the hands of the assessee-appellant. 2. The AO has observed that the payments were made by the Company on behalf of the appellant, and this is not a matter of dispute. The AO has also not questioned the sources of the fund, and the assessee's explanation that the sources were from the Company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure on electronics items and cloths were negligible and were incurred overseas for the purposes of gifting to customers/clients of M/s Govind Steel Co. Ltd. The appellant has, in his favour cited the cases of MI5 Oil & Natural Gas corporation Ltd Vs Assistant Commissioner of Income Tax (DS)- ITAT ( Ahd) [20~3] 34 taxmann.com 172 (Ahmadabad Bench) and the judicial citation in Shri Bipin Kotak Vs ACIT, Central Circle, Mumbai in ITA NO 4866/Mum/2009 [A.Y 2006-07] in the ITAT, Mumbai Bench, "H", Mumbai, date of order being 29th July, 2011. In the said second case I judgment there are similar sets of facts and circumstances wherein as para No. 5 the Hon'ble ITAT has observed as under: 05. "We have heard the arguments of both the sides and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fit tax, the. Employees will not be liable to income tax on the perquisite value of motor car provided by the employer. As rightly contended by the learned counsel for the assessee, circular no. 8/2005 dated 29. 08.2005 issued by the Board explaining the provisions relating to fringe benefit tax thus makes it clear that although fringe benefit tax is recovered from employer, the same actually is the levy on employees for any privilege, service, facility or amenity directly or indirectly provided by the employer whether by way of reimbursement or otherwise. As further clarified in the circular, fringe benefit tax is levied on the expenses incurred by the employer irrespective of whether the same are incurred for official or personal purposes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This, in my opinion would cover all items of expenses whether covered by the FBT payments by the Employer Company or otherwise. In summary, the addition to the extent of Rs. 1,24,574/- is sustained, and the balance is deleted. The appellant gets relief accordingly." 6. Aggrieved, the assessee is in appeal before us on the following grounds:- 1. That in the facts and circumstances of the case the Learned Commissioner of Income Tax (Appeals)-23, Kolkata, erred in arbitrary confirming the addition of Rs. 1,24,574 being 10% of the overall expenses incurred by the Assessee through credit card on behalf of its employer. 2. That the appellant craves leave to take additional grounds, and /or to amend or withdraw any of the foregoing grou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... included in the FBT return and hence by placing reliance on the Circular No. 8/2005 dated 29.8.2005, there cannot be any element of perquisite to be taxed in the hands of the assessee employee. In any case, if at all, there is no doubt in the mind of the revenue with regard to the subject mentioned expenses, the revenue could examine the same only in the hands of the company M/s Govind Steel Co. Ltd and not in the hands of the assessee employee. We find that both the authorities below had grossly erred in making some addition towards the same on an estimated basis. Hence we have no hesitation in directing the ld AO to delete the entire addition made in this regard. Accordingly the Grounds raised by the assessee are allowed. 8. In the resu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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