TMI Blog2008 (9) TMI 115X X X X Extracts X X X X X X X X Extracts X X X X ..... ith Mrs. Mauna M. Bhatt for the appellant. S.N. Soparkar with Mrs. Swati Soparkar for the respondent. JUDGMENT The judgment of the court was delivered by D.A. MEHTA J. All these six appeals are taken up for hearing together as they emanate out of a common order dated June 22, 2007, made by the Income-tax Appellate Tribunal, Ahmedabad, in various cross-appeals filed by the appellant-Revenue and the respondent-assessee in the following circumstances. 2. The facts, as briefly stated by the Tribunal, are that the assessee, viz., M/s. Reliance Industries Ltd. ("RIL" for short) distributed free food/meal coupons as per companies policy to its employees for purchase of meal. For this purpose, the assessee-company had entered i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Furthermore, two orders under section 271C of the Act were also framed levying penalties for non-compliance with the requirement of deducting tax at source by the respondent-assessee under section 192 of the Act. According to the Assessing Officer, in the light of rule 3(7) (iii) of the Income-tax Rules, 1962 (the Rules) the value of free meals provided by an employer to an employee had to be treated as perquisite within the meaning of section 17(2) of the Act for being taxed under the head "Salaries", but the amount had to be reduced if any amount against such expenditure incurred by the employer was recovered from the employee concerned. That the proviso under the said clause (iii) of sub-rule (7) of rule 3 provided for an exception but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atter in second appeal before the Tribunal against retention up to 30 per cent. value of the coupons ; while the Revenue challenged the order of the Commissioner (Appeals) on the merits and to the extent of relief granted. All the appeals were heard by the Tribunal together and the Tribunal came to the conclusion that the assessee could not be considered to have defaulted in any manner in the light of the evidence which has come on record. The findings in this relation have been recorded by the Tribunal in paragraph No. 18 of its order. 7. The second issue relates to applicability or otherwise of non-deduction of tax at source on payment made to the employees by way of reimbursement of conveyance expenses which, according to the Assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Whether the Appellate Tribunal is right in law and on facts in holding that when the perquisites were given by the assessee, the assessee was acting bona fide and its claim was covered by rule 3(7)(iii) to be treated as tax perquisites in request of food/meal coupon scheme and thereby holding that in respect of meal coupon, the assessee cannot be treated in default and not liable for TDS ?" "B. Whether the Appellate Tribunal is right in law and on facts in holding that reimbursement of conveyance allowance paid by the assessee was tax free perquisite and, therefore, the assessee was not required to deduct TDS in this behalf?" 12. In so far as the first issue is concerned, the relevant proviso under rule 3(7)(iii) of the Rules reads as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee had taken all necessary steps to comply with the requirement of the provisions and no default could be ascribed to the assessee merely because some employees misused facility provided. 15. Learned senior standing counsel appearing for the appellant had contended in this context that for the first period, namely, April, 2003, to November 2003, the inquiries had been undertaken on September 25, 2003, and, therefore, even if the findings of the appellate authorities that assessee had acted bona fide were to be accepted yet for the second period, covering December, 2003, to March, 2004, the assessee became liable as the assessee could not thereafter claim any bona fides. 16. The said contention proceeds on a misconception as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he relevant Explanation any expenditure incurred by the employer for journey by the employee from residence to the office or other place of work, and from office or other place of work to the residence of the employee, such amount of expenditure shall not be regarded as benefit or amenity granted or provided to the employee free of cost or at a concessional rate for the purpose of including such amount as taxable perquisite in hands of the employee. The provision, therefore, envisages that the expenditure is in relation to use of any vehicle provided by the employer. There is no qualification as to the nature of the vehicle or as to ownership of the vehicle. In fact, the Assessing Officer also accepts that if the vehicle is owned by the emp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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