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TMI Blog2018 (6) TMI 1793X X X X Extracts X X X X X X X X Extracts X X X X ..... on the basis that tax was not deducted at source on payment of Leave Travel Concession. 3. The learned CIT (Appeals) erred in not appreciating that the benefit of Leave Travel Concession is available to the Bank's employee even in cases where the journey undertaken by an employee involves a foreign leg but the employee's designated place is in India and he actually visits the place as designated. 4. The learned CIT (Appeals) erred in making the following observation, holding as under: "I am in agreement with the A.O. that as per the provisions of Section 10(5) of the Act, only the reimbursement of expenses, which are incurred on travel of employees and his family to any place in India subject to certain conditions, are exempt. Since the employee of the assessee has travelled to foreign countries, the benefit of exemption available under section 10(5) of the Act cannot be granted. At the time of advancement of LTC amount, the employer may not have been aware of it, but at the time of settlement of bills of LTC/ LFC, complete details are obtained by the employer and are available to it. Once it is noticed that the employee has visited foreign countries and he is not entitled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted the fact that this practice has been followed for the last several years by the Appellant. The learned CIT (Appeals) has stated that principle of res judicata is not applicable to Income Tax proceedings. The CIT (Appeals) has relied on the following decisions: (i) Installments Supply Private Limited Vs. Union of India, 1962 SC 53 (ii) Radha Swamy Satsang Vyas Vs. CIT, 1992 AIR 377 (iii) Distributors (Baroda) Private Limited Vs. Union of India, 1986 1 SCC 43 Whereas the facts of these cases are different from that of the Appellant. Hence the cases referred are not applicable. 8. Without prejudice to the above, the learned CIT (Appeals) erred in computing interest without furnishing the detailed working of the interest. 9. The learned CIT (Appeals) erred in not appreciating the submissions made by the Bank in the correct perspective. 10. On similar facts the learned CIT (Appeals) Nagpur has held that the travel allowance paid for the journey in India is well within the limits of the provisions u/s 10(5) read with Rule 2B. 11. With these and such other grounds that may be urged at the time of hearing the Appellant prays for the relief sought for." 3. The gro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or Rayon, the bonafide of the employer was not in doubt whereas in the instant case, as reproduced in Para 6.7 above, the AO has specifically brought out how the appellant was seized of the matter that employees are purposely taking circuitous route. The appellant has also not brought on record any evidence whatsoever to show that in considering the amount exempt u/s 10(5) of the I.T Act, it acted in a bonafide manned or that there was any basis of arriving at this conclusion (of amount being exempt)". The learned CIT (Appeals) has erred in commenting that the Appellant has not proven' its bonafide by providing any material. Whereas Appellant had produced before the Assessing Officer rules and guidelines for LFC issued by the All India Banks Association and Appellant understanding was that all important matters relating to banks have been circulated by the association and the Appellant had no reasons o believe that such circulars were not in accordance with the provisions of Income Tax Act and more particularly in the light of past practice being followed by the bank for several years and it was accepted by the Department in computing its liability towards TDS in relation to pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey undertaken by an employee involves a foreign leg but the employee's designated place is in India and he actually visits the place as designated. 4. The learned CIT (Appeals) erred in making the following observation, holding as under: "I am in agreement with the A.O. that as per the provisions of Section 10(5) of the Act, only the reimbursement of expenses, which are incurred on travel of employees and his family to any place in India subject to certain conditions, are exempt. Since the employee of the assessee has travelled to foreign countries, the benefit of exemption available under section 10(5) of the Act cannot be granted. At the time of advancement of LTC amount, the employer may not have been aware of it, but at the time of settlement of bills of LTC/ LFC, complete details are obtained by the employer and are available to it. Once it is noticed that the employee has visited foreign countries and he is not entitled for exemption for reimbursement of LTC under section 10(5) of the Act, the employer ought to have deducted Tax at Source treating the amount as not exempt and as being part of the employee's total salary. Since the assessee has intentionally not deducted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g decisions: (i) Installments Supply Private Limited Vs. Union of India, 1962 SC 53 (ii) Radha Swamy Satsang Vyas Vs. CIT, 1992 AIR 377 (iii) Distributors (Baroda) Private Limited Vs. Union of India, 1986 1 SCC 43 Whereas the facts of these cases are different from that of the Appellant. Hence the cases referred are not applicable. 8. Without prejudice to the above, the learned CIT (Appeals) erred in computing interest without furnishing the detailed working of the interest. 9. The learned CIT (Appeals) erred in not appreciating the submissions made by the Bank in the correct perspective. 10. On similar facts the learned CIT (Appeals) Nagpur has held that the travel allowance paid for the journey in India is well within the limits of the provisions u/s 10(5) read with Rule 2B. 11. With these and such other grounds that may be urged at the time of hearing the Appellant prays for the relief sought for." 5. The grounds raised by the assessee for Assessment Year 2013-14 in ITA No. 1312/Bang/2017 are as under. "1. The order of the learned CIT (Appeals), on aspects agitated in this appeal, is bad in law, contrary to the provisions of law and facts of the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The appellant has also not brought on record any evidence whatsoever to show that in considering the amount exempt u/s 10(5) of the I.T Act, it acted in a bonafide manned or that there was any basis of arriving at this conclusion (of amount being exempt)". The learned CIT (Appeals) has erred in commenting that the Appellant has not proven' its bonafide by providing any material. Whereas Appellant had produced before the Assessing Officer rules and guidelines for LFC issued by the All India Banks Association and Appellant understanding was that all important matters relating to banks have been circulated by the association and the Appellant had no reasons o believe that such circulars were not in accordance with the provisions of Income Tax Act and more particularly in the light of past practice being followed by the bank for several years and it was accepted by the Department in computing its liability towards TDS in relation to payment of LFC and exemption u/s 10(5). 6. Without prejudice to the above, the learned CIT (Appeals) erred in not appreciating that the employee is entitled to exemption under section 10(5) to the extent of expenses incurred for travel in India wher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agreement with the A.O. that as per the provisions of Section 10(5) of the Act, only the reimbursement of expenses, which are incurred on travel of employees and his family to any place in India subject to certain conditions, are exempt. Since the employee of the assessee has travelled to foreign countries, the benefit of exemption available under section 10(5) of the Act cannot be granted. At the time of advancement of LTC amount, the employer may not have been aware of it, but at the time of settlement of bills of LTC/ LFC, complete details are obtained by the employer and are available to it. Once it is noticed that the employee has visited foreign countries and he is not entitled for exemption for reimbursement of LTC under section 10(5) of the Act, the employer ought to have deducted Tax at Source treating the amount as not exempt and as being part of the employee's total salary. Since the assessee has intentionally not deducted Tax at Source on a payment, to which the employee is not entitled for any exemption, the Assessing Officer has rightly held the assessee to be in default and raised the demand under section 201(1) and 201(1A) of the Act." The above observations are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are different from that of the Appellant. Hence the cases referred are not applicable. 8. Without prejudice to the above, the learned CIT (Appeals) erred in computing interest without furnishing the detailed working of the interest. 9. The learned CIT (Appeals) erred in not appreciating the submissions made by the Bank in the correct perspective. 10. On similar facts the learned CIT (Appeals) Nagpur has held that the travel allowance paid for the journey in India is well within the limits of the provisions u/s 10(5) read with Rule 2B. 11. With these and such other grounds that may be urged at the time of hearing the Appellant prays for the relief sought for." 7. The grounds raised by the assessee for Assessment Year 2013-14 in ITA No. 1314/Bang/2017 are as under. "1. The order of the learned CIT (Appeals), on aspects agitated in this appeal, is bad in law, contrary to the provisions of law and facts of the case and without appreciation of the facts and circumstances of the case in their right perspective. 2. The learned CIT (Appeals) erred in passing an order under section 201(1) and 201(1A) raising demand of Rs. 1,31,727/- on the basis that tax was not deducted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The learned CIT (Appeals) has erred in commenting that the Appellant has not proven' its bonafide by providing any material. Whereas Appellant had produced before the Assessing Officer rules and guidelines for LFC issued by the All India Banks Association and Appellant understanding was that all important matters relating to banks have been circulated by the association and the Appellant had no reasons o believe that such circulars were not in accordance with the provisions of Income Tax Act and more particularly in the light of past practice being followed by the bank for several years and it was accepted by the Department in computing its liability towards TDS in relation to payment of LFC and exemption u/s 10(5). 6. Without prejudice to the above, the learned CIT (Appeals) erred in not appreciating that the employee is entitled to exemption under section 10(5) to the extent of expenses incurred for travel in India where the employee's designated place is in India and he actually visits the place as designated even in cases where the journey undertaken by an employee involves a foreign leg. 7. The learned CIT (Appeals) has not appreciated the fact that this practice has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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