TaxTMI 
TaxTMI 
TaxTMI 
2019 (10) TMI 517
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....cts and in the circumstances of the case, the Ld. Commissioner of Income Tax (Appeals)-1, erred in not giving sufficient opportunity to the assessee company to be heard. 4. The appellant craves leaved to add, amend alter or otherwise raise any other ground of appeal. 2, Facts giving rise to the present appeal are that the assessee company is engaged in the distribution of power in the state of Madhya Pradesh. The A.O. issued a notice u/s 115WH of the Income Tax Act, 1961 (hereinafter called as 'the Act'). In response thereto, the assessee filed written submissions. The A.O. after considering the submissions made addition of Rs. 7,36,09,000/- as Fringe Benefit Tax (in short 'FBT'). Further, on account of mistake of the assessee in respect of valuation of the fringe benefit, the assessment order u/s 115WG r.w.s. 115WE of the Act was passed on 29.12.2016 by making the aforementioned additions. 3. Aggrieved against this, the assessee preferred an appeal before Ld. CIT(A), who after considering the submissions dismissed the appeal. Thereby, the additions made by the A.O. were confirmed. Ld. Counsel for the assessee Shri Manoj Munshi vehemently argued that the authorities below were ....
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....nd would be taxable at the hands of the employees. Ld. CIT(A) rejected this claim on the basis that the assessee could not support its contention by furnishing material evidences proving that perquisite has already been taxed in the hands of the employees. Moreover, auditor of the assessee company opined that the amount which required to be taxed as FBT. Ld. Counsel submitted that opinion of the auditor would not replace or supersede the law. He took us through the relevant provisions of the Act. For the sake of clarity, section 115WB of the Act is reproduced as under: "Section 115WB of Income Tax Act "Fringe benefits" Section 115WB. (1) For the purposes of this Chapter, "fringe benefits" means any consideration for employment provided by way of- (a) any privilege, service, facility or amenity, directly or indirectly, provided by an employer, whether by way of reimbursement or otherwise, to his employees (including former employee or employees); (b) any free or concessional ticket provided by the employer for private journeys of his employees or their family members; (c) any contribution by the employer to an approved superannuation fund for employees; and (d) any speci....
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.... on advertisement,- (i) being the expenditure (including rental) on advertisement of any form in any print (including journals, catalogues or price lists) or electronic media or transport system; (ii) being the expenditure on the holding of, or the participation in, any press conference or business convention, fair or exhibition; (iii) being the expenditure on sponsorship of any sports event or any other event organised by any Government agency or trade association or body; (iv) being the expenditure on the publication in any print or electronic media of any notice required to be published by or under any law or by an order of a court or tribunal; (v) being the expenditure on advertisement by way of signs, art work, painting, banners, awnings, direct mail, electric spectaculars, kiosks, hoardings, bill boards, display of products or by way of such other medium of advertisement; (vi) being the expenditure by way of payment to any advertising agency for the purposes of clauses (i) to (v) above; (vii) being the expenditure on distribution of samples either free of cost or at concessional rate; and (viii) being the expenditure by way of payment to any person of repute f....
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....d if,- [(a) in a case where an unfurnished accommodation is provided by any employer other than the Central Government or any State Government and- (i) the accommodation is owned by the employer, the value of the accommodation determined at the specified rate in respect of the period during which the said accommodation was occupied by the assessee during the previous year, exceeds the rent recoverable from, or payable by, the assessee; (ii) the accommodation is taken on lease or rent by the employer, the value of the accommodation being the actual amount of lease rental paid or payable by the employer or fifteen per cent of salary, whichever is lower, in respect of the period during which the said accommodation was occupied by the assessee during the previous year, exceeds the rent recoverable from, or payable by, the assessee;] (b) in a case where a furnished accommodation is provided by the Central Government or any State Government, the licence fee determined by the Central Government or any State Government in respect of the accommodation in accordance with the rules framed by such Government as increased by the value of furniture and fixtures in respect of the period d....
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...., as the case may be, but does not include the following, namely:- (a) dearness allowance or dearness pay unless it enters into the computation of superannuation or retirement benefits of the employee concerned; www.taxmann.com h (b) employer's contribution to the provident fund account of the employee; (c) allowances which are exempted from the payment of tax; (d) value of the perquisites specified in this clause; (e) any payment or expenditure specifically excluded under the proviso to this clause.] [Explanation 4.-For the purposes of this sub-clause, "specified rate" shall be- (i) fifteen per cent of salary in cities having population exceeding twenty-five lakhs as per 2001 census; (ii) ten per cent of salary in cities having population exceeding ten lakhs but not exceeding twenty-five lakhs as per 2001 census; and (iii) seven and one-half per cent of salary in any other place;] (iii) the value of any benefit or amenity granted or provided free of cost or at concessional rate in any of the following cases- (a) by a company to an employee who is a director thereof; (b) by a company to an employee being a person who has a substantial interest in the com....
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....y or sweat equity shares shall be the fair market value of the specified security or sweat equity shares, as the case may be, on the date on which the option is exercised by the assessee as reduced by the amount actually paid by, or recovered from, the assessee in respect of such security or shares; (d) "fair market value" means the value determined in accordance with the method as may be prescribed; (e) "option" means a right but not an obligation granted to an employee to apply for the specified security or sweat equity shares at a predetermined price; (vii) the amount of any contribution to an approved superannuation fund by the employer in respect of the assessee, to the extent it exceeds one lakh rupees; and (viii) the value of any other fringe benefit or amenity26 as may be prescribed27:] [Provided that nothing in this clause shall apply to,- (i) the value of any medical treatment provided to an employee or any member of his family in any hospital maintained by the employer; 2 (ii) [(ii) any sum paid by the employer in respect of any expenditure actually incurred by the employee on his medical treatment or treatment of any member of his family- (a) in any hosp....
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....ent permitted by the Reserve Bank of India; and (B) the expenditure on travel shall be excluded from perquisite only in the case of an employee whose gross total income, as computed before including therein the said expenditure, does not exceed two lakh rupees;] (vii) any sum paid by the employer in respect of any expenditure actually incurred by the employee for any of the purposes specified in clause (vi) subject to the conditions specified in or under that clause : [Provided further that for the assessment year beginning on the 1st day of April, 2002, nothing contained in this clause shall apply to any employee whose income under the head "Salaries" (whether due from, or paid or allowed by, one or more employers) exclusive of the value of all perquisites not provided for by way of monetary payment, does not exceed one lakh rupees.] Explanation.-For the purposes of clause (2),- (i) "hospital" includes a dispensary or a clinic 41[or a nursing home]; (ii) "family", in relation to an individual, shall have the same meaning as in clause (5) of section 10; and (iii) "gross total income" shall have the same meaning as in clause (5) of section 80B;]" 8. Therefore, in our ....