TMI Blog2013 (2) TMI 881X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions for Bharat Overseas Bank Ltd. Employees Pension Fund Trust as made by the assessee. He also levied interest under section 115WJ(3) and 115WK of the Act of Rs..23,52,302/- and Rs..2,46,501/- respectively. 3. Aggrieved, the assessee carried the matter in appeal. The gist of assessee s argument in the lower appellate proceedings was that the provision in question as added by the Assessing Officer did not amount to actual contribution to an approved superannuation fund and therefore, the charging section i.e. 115WB of the Act does not apply. We notice that assessee s argument stands accepted by the CIT(A) as under: 3.1 I have considered the facts of the case and the various submissions made by the Ld.AR. I find that the provisions of the Act are clear in this regard. As submitted by the Ld AR, as per the provisions of section 115WB (c) only the contribution to approved superannuation fund is chargeable to tax. Therefore, the liability is not fastened merely because a provision is made in the accounts. The amount provided becomes chargeable to tax once the same is contributed to the fund. I am therefore of the considered opinion that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade a provision of ₹ 12.61 crores. It means that the assessee company has made provision for payment of superannuation fund and accordingly as per definition of Fringe Benefit, this has already been provided as a way of contribution though paid in the next year. Hence, this is includible in the calculation of Fringe Benefit as per definition of Fringe Benefits. The definition clearly states that this is to be provided only, not actual payment is mentioned in the definition in the Act. 4. The assessee challenged the addition before the learned CIT (A) and it was submitted that the AO during the course of assessment proceedings asked the assessee as to why provisions of Rs..12,61,00,000/- made in respect of Superannuation Fund be not included for the purpose of levy of Fringe Benefit Tax. In this regard, the assessee submitted that the assessee vide its letters dated 26-03-2008 and 10.04.2008 addressed to. The AO explained that as per the provisions of section 115WC (1 )(b) of the IT Act which provides computation. of value of Fringe Benefit, only actual amount of contribution towards superannuation fund referred to in section 115W B (1) ( c ) which defin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fied as to what is the actual payment made for superannuation fund during the year and what actually has been claimed u/s. 43B(b) of the Act. In the letter dated 26/3/2008, addressed to the Addl. CIT, Bhavnagar Range-1, Bhavnagar, the Dy. General Manager (F A) of the appellant Bank has mentioned as under: During the year, under consideration i.e. for the year ended on 31st March, 2006, bank has made provision for Superannuation fund for employees amounting to ₹ 12.61 crores. We were under the honest belief that Fringe Benefit Tax (FBT) is leviable in respect of provision made for approved superannuation fund and accordingly, by way of abandoned caution and to avoid liability of interest, payment of FBT amounting to ₹ 4,50,00,000/- has been made. Therefore, I hold that the amount is includible in the calculation of FBT. In view of above discussions, the addition made by the AO of ₹ 12,61,00,000/- is hereby, upheld. The contention of the appellant on this issue is rejected. 6. Learned Counsel for the assessee reiterated the submissions made before authorities below and also referred to Fourth Sc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts) ( 1) For the purpose of this Chapter; the value of fringe benefits shall be the aggregate of the following, namely- ( a) .......... ( b) Actual amount of the contribution referred to in clause (c) of Sub-section 115WB. 7.4 The philosophy behind the enactment of FBT has been explained in the Finance Minister s speech in Para 160 as under (page 56 of 273 ITR (St.)): I have looked into the present system of taxing perquisites and I have found that many perquisites are disguised as fringe benefits and escape tax. Neither the employer nor the employee pays any tax on these benefits, which are certainly of considerable material value. At present, where benefits are fully attributable to the employee they are taxed in the hands of the employee; that position will continue. In addition, I now propose that where the benefits are usually enjoyed collectively by the employees and cannot be attributed to individual employees, they shall be taxed in the hands of the employer. However, transport services for workers and staff and canteen services in an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fit as provided u/s 115WB (1) (c) provides any consideration for employment provided by way of any contribution by the employer to an approved superannuation fund for employees. What is required by the above provision for taxing the fringe benefit that there should be contribution by the employer to an approved superannuation fund for employees. But the definition of contribution referred to by the learned Counsel for the assessee provides contribution by an employe3r out of his own money to the individual account of an employee. There is a contradiction in both the language. Moreover, Sub-section (2) of Part A of Fourth Schedule to the Income Tax Act provides that in this part, unless the context otherwise requires .. Since, the definition of fringe benefit is out of context as per Fourth Schedule, the contention of learned Counsel for the assessee is rejected. 10. Considering the above discussions, it is clear that fringe benefit could be taxed when the actual contribution is contributed by the employer to an approved superannuation fund for employees. Therefore, no fringe benefit tax is leviable when there is no actual contribution is made by the assessee b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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