2026 (4) TMI 659

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....turns filed by the assessee, disallowed certain claims which includes the medical reimbursement upto Rs. 15,000/- to the employees of the assessee, which had not been included for the Fringe Benefit Tax. Relying on the clarification issued by the C.B.D.T in its Circular No:08/2005, the Assessing Officer added tax on the amount of medical reimbursement given to the employees, which was excluded from tax at the hands of the employees. 2. The claim of the assessee Company is that, as per Section 17 of the Income Tax Act, medical reimbursement by the company to its employees is a taxable perquisite only if the amount exceeds Rs. 15,000/- per annum. The proviso (v) to Section 17(2) of the Act exempts medical reimbursement of the employee upto....

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....e CIT (A). Further, appeals before the Tribunal by the assessee also got dismissed. Hence, being aggrieved by the orders of the ITAT, which has upheld the levy of Fringe Benefit Tax (FBT) upon the employer on the medical reimbursement to the employees upto Rs. 15,000/-p.a., during the assessment years 2006-2007, 2007-2008 and 2008-2009, is under challenge. 5. The substantial question of law in all these three appeals are one and the same. It reads as below:- "Whether on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the Medical reimbursement upto Rs 15,000/- per employee is chargeable to Fringe Benefit Tax under Section 115 WB (2) of the Act"? 6. The Learned Counsel for the appel....

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....anding Counsel for the Revenue, in support of the impugned order submitted that, Section 115 WB deals 'Fringe Benefit' and what are all the privileges, services, facilities or amenity fall within the scope of Fringe Benefit. Sub- section (1) of Section 115 WB(3) excludes 'perquisite' paid or payable by the employee for computing Fringe Benefit Tax in the hands of employer. The term 'perquisite' is explained as an inclusive definition in Section 17(2). The proviso (v) to sub-section (2) to Section 17 of the Act, excludes, the value of any medical treatment provided to an employee or any member of his family upto Rs. 15,000/- per annum. Therefore, according to the learned Counsel for the Revenue, since tax on medical reimbursement upto Rs. 15....