TaxTMI 
TaxTMI 
2010 (12) TMI 605
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.... ground of appeal reads as follows:- "The learned CIT(A) erred in holding that salary paid to the employees in the form of medical reimbursements aggregating to Rs. 9,89,046 was liable to the levy of fringe benefit tax. Having regard to the facts and circumstances of the case, the appellant submits that the said amount be excluded, as claimed by the appellant." 2. The facts of the case are that the assessee company filed its return of fringe benefit on 24th Nov., 2006 declaring the value of fringe benefit at Rs. 14,48,890. The AO has vide order under s. 115WE(3) of the Act dt. 24th Dec., 2008, assessed the value of fringe benefit by holding that the salary paid to the employee in the form of medical reimbursement aggrega....
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....ount by way of medical advance, is being paid through salary of every month. She referred to the Budget Speech by the Minister of Finance delivered on 28th Feb., 2005 reported in (2005) 194 CTR (St) 1 : (2005) 273 ITR (St) 25, specifically to para 160. She also referred to the Memorandum Explaining the Provisions in Finance Bill, 2005 and submitted that, it is very clear that where perquisites were directly attributed to the employees, the same would continue to be taxed in their hands in accordance with the existing provisions of s. 17(2) of the IT Act. She prayed for relief. 4. The learned Departmental Representative, Mr. D. Songate, on the other hand, opposed the contentions of the assessee and submitted that in this case, medi....
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....reatment referred to in cls. (i) and (ii)]; so, however, that such sum does not exceed fifteen thousand rupees in the previous year;" This sub-clause treats the expenditure actually incurred by the employee on medical treatment for himself or his family, and which is paid by the employee, in excess of Rs. 15,000 , would be a perquisite which would be taxable as salary. It is clear that reimbursement of medical expenditure as in the case referred above, is not chargeable to tax as a perquisite if the amount does not exceed Rs. 15,000 per annum. 7. Sec. 115WB(3) reads as follows:- "For the purposes of sub-s. (1), the privilege, service, facility or amenity does not include perquisites in respect of which tax is p....
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....and cannot be attributed to individual employees, they shall be taxed in the hands of the employer." (Emphasis, italicized in print, ours). 8. From the above, it is clear that where perquisites/benefits which are fully attributable to the employee and are taxed in their hands, would be continued to be taxed under the existing provisions of s. 17(2) of the Act. Only in case where the benefits are usually enjoyed collectively by the employees and cannot be attributed to an individual employee, they shall be taxed in the hands of the employer. 9. In sub-s. (3) of s. 115WB it is made clear that s. 115WB(1)(a) does not include such perquisite in respect of which tax is paid or payable by the employees. 10. In the case on h....