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TMI Blog2013 (2) TMI 881X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the mere provision made by the appellant will not render the amount to be chargeable to tax. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 defines Fringe Benefits is leviable for Fringe Benefit Tax. As per provisions of section 115WB(1)(c) of the I.T.Act, Fringe Benefit Tax means any contribution by the employer to approved superannuation fund for the employees. During the year under c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned 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 Schedule to IT Act relating to recognized provident funds and referred to Part B of the Schedule regarding approved superannuation funds in which definition of contribution has been assigned the same expression in Rule 2 of Part A in relation to provident funds. In part A of the Schedule definition of contribution is provided in Sub-section 2(c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ape 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 office or factory will be outside the tax net." 8. When the above provisions are read together in the light of the Finance Minister's speech, it would be clear that as per Finance Act 2005, under Section 115WC (1) (b) of the IT Act what would be taxable by way of fringe benefit is the actual amount of contribution referred to in clause (c) of Sub-section (1) of Section 115WB. Section 115WB (1) (c) includes in the fringe benefits any contribution by the employer to an approved superannuation fund for employees. The word actual is not used in section 115WB (1) (c) but it is used in Section 115WC (1) (b) which defines value of fringe benefits ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at 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 bank to the approved superannuation fund. Since the authorities below have not discussed the actual facts in the impugned orders and nothing is brought on record whether assessee actually contributed the amount towards approved superannuation fund; therefore, the matter requite reconsideration at the level of the AO. 11. We accordingly, set aside the orders of the authorities below and restore the matter to the file of the AO with direction to re-decide the issue in the light of the findings given in this order by giving reasonable sufficient opportunity of being heard to the assessee. 12. In the result, the appeal of the assessee is allowed for statistical pur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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