Fringe Benefit Tax liability upheld where audit report quantified taxable benefits and the statutory deeming scheme applied.

Fringe Benefit Tax applied where the assessee belonged to the class covered by Chapter XII-H, even though nil fringe benefits were returned, because the tax audit report quantified taxable fringe benefits and the assessee had already deposited the tax. The Tribunal followed a co-ordinate bench decision on identical facts and treated the statutory deeming scheme as operative; the amount certified by the auditors was therefore liable to tax. As the assessed fringe benefits were upheld, the challenge to levy of interest under section 115WJ also failed.

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Issues: Whether the assessee was liable to Fringe Benefit Tax on the expenditure quantified in the tax audit report and whether the levy of interest under section 115WJ was sustainable.

Analysis: The assessee returned nil fringe benefits, but the tax audit report quantified taxable fringe benefits and the assessee had itself deposited the tax in the Government treasury. The Tribunal noted that the assessee fell within the class of assessees covered by the provisions of Chapter XII-H and that the Gujarat High Court's interim order did not assist a category 1 assessee. Following the co-ordinate bench decision on identical facts, the Tribunal held that the statutory deeming scheme applied and that the amount certified by the auditors was liable to tax. Since the assessed fringe benefits were upheld, the levy of interest followed.

Conclusion: The assessee was liable to Fringe Benefit Tax on the amount determined by the authorities, and the challenge to the interest levy also failed.

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