TaxTMI 
TaxTMI 
2014 (7) TMI 906
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.... erred in confirming the reassessment proceedings initiated u/s 115WG of the Income tax Act, 1961 ("the Act") by the Assessing Officer. 2. He failed to appreciate and ought to have held that: a. The entire reopening proceedings u/s 148 are "bad in law" b. All material facts regarding the FBT were truly and fully disclosed in the Income tax Return and in Tax Audit Report. c. No fresh material has been brought on record by the AO and the assessment has been reopened based on the same facts which were available on record and such reopening tantamount to change of opinion. GROUND NO. 2 - FBT is not chargeable when there is no Fringe Ben....
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....g that expenditure of Rs. 7,09,20,891 incurred by the Appellant on Mobile Phone Expenses was liable to the levy of Fringe Benefit Tax as this expenses did not result in any benefit to the employees. 2. The Appellant therefore, prays that the said amount be excluded from the levy of FBT as claimed by Appellant. GROUND NO.6 - Travelling Expenses (Domestic & Foreign Fare) 1. The CIT(A) erred in holding that expenditure of Rs. 17,94,95,549 incurred by the Appellant on travel was liable to the levy of Fringe Benefit Tax as this expenses did not result in any benefit to the employees. 2. In the alternative and without prejudice to the above the benefit, if any....
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....ture expenses Exp. Amount Rs. % of expenses Value of Fringe Benefit 1. Employee's Welfare expenses 136,829,594 20% 27,365,919 2. Entertainment expenses 1,073,835 20% 214,767 3. Festival Celebration expenses 3,072,775 50% 1,536,388 4. Use of any club facilities 1,186,370 50% 593,185 5. Gifts 1,734,160 50% 867,080 6. Motor car expenses 50,482,675 20% 10,096,535 7. ESOP 295,925,087 100% 295,925,087 Total 490,304,496 336,598,960 From the Notes to Annexure 'Value of Fringe Benefit' in the Tax Audit Report it is seen that the assessee has not considered the expenses on acc....
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.... 84,552,043 20% 16,910,400 3. Telephone-Mobile Exps 70,920,891 20% 14,184,178 4. Travel Exps. Domestic & Foreign fare 179,495,549 5% 8,974,777 5. Use of Hotel/lodging and boarding 48,908,354 20% 9,781,671 Total 471,161,292 67,307,926 Since the assessee has not offered the above expenses to fringe benefit tax, I have reason to believe that Fringe Benefits amounting to Rs. 47.11 crore chargeable to tax have escaped assessment, hence, the assessment proceedings are reopened u/s 1I5WG of the I.T. Act" 5. The assessee objected to the reopening proceedings u/s. 115WG of the Act. The AO was of the opinion that where the regular assessment has ....
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....sessment cannot be reopened unless there is some new tangible material evidence. For this proposition, the Ld. Counsel strongly relied upon the decision of the Hon'ble Delhi Court in the case of CIT Vs Orient Craft Ltd. 354 ITR 536. The Ld. Counsel further supported his claim by the Third Member decision of the Tribunal, Mumbai Bench in the case of Telco Dadajee Dhackjee Ltd. in ITA No. 4613/M/05. 8. The Ld. Departmental Representative supported the findings of the authorities below and relied upon the decision of the Hon'ble Allahabad High Court in the case of EMA India ltd. Vs ACIT 226 CTR 659. 9. We have carefully considered the rival submissions and perused the orders of the lower authorities and the decisions relied upon ....
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....the alleged reason to believe is not relevant for the formation of the belief that income chargeable to tax has escaped assessment. In doing so, it is further open to the assessee to challenge the reasons recorded under section 148(2) on the ground that they do not meet the standards set in the various judicial pronouncements. 10. We find that the reasons disclosed by the AO that there was escapement of income on going through the return of FBT filed by the assessee after he accepted the return u/s. 115WE(1) without scrutiny and nothing more. This is nothing but a review of the earlier proceedings and as observed by the Hon'ble Delhi High Court (supra) " abuse of power by the AO". We further find that there is nothing in the reasons ....