2016 (5) TMI 1083 - AT - Income Tax

Tribunal Upholds Assessee's Partial Win on Fringe Benefit Tax |

The Tribunal dismissed the Revenue's appeal against the CIT (A)'s order on Fringe Benefit Tax assessment for the AY 2008-09. The decision upheld the ... Fringe benefit tax - CIT (A) found that the expenditure on hiring of motor-car for meetings, inspection etc., as well as expenses on owned motor car at corporate office are subjected to FBT - Held that:- As per the provisions of Section 115WB(2) of the Act, what is to be considered as fringe benefit is the benefit given to the employee directly or indirectly. In view of the above facts and circumstances of the case and by following the earlier decision of this Tribunal we do not find any error or any irregularity in the impugned order of the CIT (A). We find that there is nothing on record to indicate that the assessee had filed any additional or fresh evidence before the CIT (A). Therefore we do not find any merits in the grounds raised by the Revenue. Issues:- Fringe Benefit Tax assessment under section 115WG of the Income-tax Act, 1961 for the assessment year 2008-09.- Challenge to the assessment order by the Assessee before the CIT (A) regarding the expenditure on vehicles hired for official purposes.- Violation of Rule 46A of the Income-tax Rules by the CIT (A) in verifying documents without giving an opportunity to the AO.- Confirmation of the addition in the fringe benefit valuation by the CIT (A) based on the Tribunal's decision in the Assessee's own case for the AY 2006-07.- Consideration of expenditure on vehicles used for transportation and other official purposes.- Interpretation of the provisions of Section 115WB(2) regarding fringe benefits given to employees directly or indirectly.Analysis:1. The Revenue appealed against the CIT (A)'s order on Fringe Benefit Tax assessment for the AY 2008-09. The AO had added a specific amount to the fringe benefit value, which the Assessee contested, arguing that the vehicles hired were solely for official use and not subject to FBT under section 115WBF of the Act. The CIT (A) partially ruled in favor of the Assessee, citing a previous Tribunal decision for the AY 2006-07 related to motor car hiring expenses for employees.2. The Revenue contended that the CIT (A) failed to follow Rule 46A of the Income-tax Rules by verifying documents without allowing the AO to respond. The Assessee's representative argued that no new evidence was presented before the CIT (A), referencing existing expenditure details provided to the AO. The CIT (A) upheld the addition in the fringe benefit valuation based on the Tribunal's prior decision in the Assessee's case for the AY 2006-07.3. The CIT (A) examined expenses related to the Assessee's vehicles used for storage transportation and official purposes. The total addition by the AO was partially confirmed by the CIT (A) concerning motor car hiring for meetings and inspections, and expenses on owned motor cars at the corporate office, aligning with the Tribunal's decision for the AY 2006-07.4. The Tribunal analyzed the provisions of Section 115WB(2) to determine what constitutes a fringe benefit, emphasizing benefits provided directly or indirectly to employees. The decision highlighted that expenses for activities benefiting the company but not directly related to employees were outside the scope of FBT. The Tribunal upheld the CIT (A)'s order, finding no new evidence presented and no errors in the decision-making process.5. Ultimately, the Tribunal dismissed the Revenue's appeal, affirming the CIT (A)'s order based on existing evidence and the Tribunal's previous ruling. The decision was based on the interpretation of relevant legal provisions and the specific nature of the expenses incurred by the Assessee.