TMI Blog2019 (10) TMI 517X X X X Extracts X X X X X X X X Extracts X X X X ..... the Ld. D.R. The law is well settled that levy of tax should be at the right hand. In the case in hand, we have held that supply of electricity to its employees at a concessional rate would be a perquisite for the employees. Under these circumstances, the revenue is at liberty to proceed against the assessee for non-deduction of tax at source in the event, if the employees have offered the benefit for taxation in their respective returns, the assessee would not be liable for the FBT. It would be tantamount to double taxation. We therefore, set aside the orders of the authorities below and restore the issue to the file of the A.O. for verifying whether the employees offered such benefit in their returns, if any. - Assessee grounds raised in this appeal are allowed for statistical purposes. - ITA No.181/Ind/2018 - - - Dated:- 11-10-2019 - Shri Kul Bharat, Judicial Member And Shri Manish Borad, Accountant Member For the Appellant : Shri Manoj Munshi, A.R. For the Respondent : Smt. Ashima Gupta, D.R. ORDER PER KUL BHARAT, J.M: This appeal by the assessee is directed against order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e; therefore, the same would be out of the purview of the FBT. In support of this, the Ld. Counsel has drew our attention to the tax payer s information series 36 in respect of valuation of perquisites. Ld. Counsel submitted that it has been clarified that certain perquisites are taxed in the hands of the employees as part of salary income and the other fringe benefits are taxed in the hands of the employer by levying of FBT. However, where the perquisite is taxed in the hands of the employee, it is not taxed in the hands of the employer. Ld. Counsel has further taken us through the relevant provisions to buttress his contention that the supply of electricity on concessional rates is a perquisite and would be liable to be taxed in the hands of the employees of the assessee. 4. Per contra, Ld. D.R. supported the orders of the authorities below. Ld. D.R. strongly relied upon the impugned order. She further contended that the assessee failed to furnish evidence in support of its contention that the employees have offered the benefit for taxation and the assessee has deducted tax thereof. In the absence of such material evidence, the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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 know-how 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 has, in the course of his business or profession (including any activity whether or not such activity is carried on with the object of deriving income, profits or gains) incurred any expense on, or made any payment for, the following purposes, namely:- (A) entertainment; (B) provision of hospitality of every kind by the empl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iture 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... employer, the value of the accommodation being the actual amount of lease rental paid or payable by the employer or fifteen per cent of salary, whichever is lower, in respect of the period during which the said accommodation was occupied by the assessee during the previous year, exceeds the rent recoverable from, or payable by, the assessee;] (b) in a case where a furnished accommodation is provided by the Central Government or any State Government, the licence fee determined by the Central Government or any State Government in respect of the accommodation in accordance with the rules framed by such Government as increased by the value of furniture and fixtures in respect of the period during which the said accommodation was occupied by the assessee during the previous year, exceeds the aggregate of the rent recoverable from, or payable by, the assessee and any charges paid or payable for the furniture and fixtures by the assessee; (c) in a case where a furnished accommodation is provided by an employer other than the Central Government or any State Government and- (i) the accommodation is owned by the employer, the value of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich are exempted from the payment of tax; (d) value of the perquisites specified in this clause; (e) any payment or expenditure specifically excluded under the proviso to this clause.] [Explanation 4.-For the purposes of this sub-clause, specified rate shall be- (i) fifteen per cent of salary in cities having population exceeding twenty-five lakhs as per 2001 census; (ii) ten per cent of salary in cities having population exceeding ten lakhs but not exceeding twenty-five lakhs as per 2001 census; and (iii) seven and one-half per cent of salary in any other place;] (iii) the value of any benefit or amenity granted or provided free of cost or at concessional rate in any of the following cases- (a) by a company to an employee who is a director thereof; (b) by a company to an employee being a person who has a substantial interest in the company; (c) by any employer (including a company) to an employee to whom the provisions of paragraphs (a) and (b) of this sub-clause do not apply and whose incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at equity shares shall be the fair market value of the specified security or sweat equity shares, as the case may be, on the date on which the option is exercised by the assessee as reduced by the amount actually paid by, or recovered from, the assessee in respect of such security or shares; (d) fair market value means the value determined in accordance with the method as may be prescribed; (e) option means a right but not an obligation granted to an employee to apply for the specified security or sweat equity shares at a predetermined price; (vii) the amount of any contribution to an approved superannuation fund by the employer in respect of the assessee, to the extent it exceeds one lakh rupees; and (viii) the value of any other fringe benefit or amenity26 as may be prescribed27:] [Provided that nothing in this clause shall apply to,- (i) the value of any medical treatment provided to an employee or any member of his family in any hospital maintained by the employer; 2 (ii) [(ii) any sum paid by the employer in respect of any expenditure actuall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l treatment; (3) travel and stay abroad of one attendant who accompanies the patient in connection with such treatment, 39[subject to the condition that- (A) the expenditure on medical treatment and stay abroad shall be excluded from perquisite only to the extent permitted by the Reserve Bank of India; and (B) the expenditure on travel shall be excluded from perquisite only in the case of an employee whose gross total income, as computed before including therein the said expenditure, does not exceed two lakh rupees;] (vii) any sum paid by the employer in respect of any expenditure actually incurred by the employee for any of the purposes specified in clause (vi) subject to the conditions specified in or under that clause : [Provided further that for the assessment year beginning on the 1st day of April, 2002, nothing contained in this clause shall apply to any employee whose income under the head Salaries (whether due from, or paid or allowed by, one or more employers) exclusive of the value of all perquisites not provided for by way of monetary payment, does not exceed one ..... 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