2013 (5) TMI 849 - AT - Income Tax

Summary

Issues involved: Appeal against order of CIT(A) regarding deletion of addition made on medical aid and entertainment expenses as taxable fringe benefits for assessment year 2009-2010.

Medical Aid Issue: The Tribunal held that medical reimbursement, though taxable, is exempt up to a certain limit for employees. Granting exemption to employees does not make the amount subject to Fringe Benefit Tax (FBT). The Tribunal cited a case where a similar issue was decided in favor of the assessee. Therefore, the Tribunal decided in favor of the assessee, dismissing the revenue's appeal on this ground.

Entertainment Expenses Issue: The Tribunal noted that certain expenses, like snacks and refreshments, are excluded from fringe benefits under the Income Tax Act. The authorities argued that the expenses were for customers, not employees, but the Tribunal disagreed. It held that if certain expenses for employees are excluded from FBT, the same exclusion applies to other persons as well. Citing a previous order, the Tribunal rejected the revenue's appeal on this ground.

In conclusion, the Tribunal dismissed the department's appeal, upholding the CIT(A)'s decision to delete the additions made on medical aid and entertainment expenses as taxable fringe benefits for the assessment year 2009-2010.