2013 (11) TMI 272 - AT - Income Tax

Assessee was liable to FBT - Assessing Officer has merely accepted the valuation of taxable fringe benefits as worked out by the assessee itself. Hence valuation of the fringe benefits at Rs. 1,34,91,288/- confirmed Held that - Assessee has considered the value of fringe benefit at Rs. Nil but however in the Tax Audit Report filed under Section 44AB the statutory auditors have quantified the value of fringe benefit and based on the aforesaid quantification, the Assessee has also deposited the FBT into Government Treasury and not in an Escrow account with the scheduled bank - Assessing Officer has considered the Assessee to be covered in the category 1 of the Assessees who were covered by the provisions of FBT - Learned A.R. could not controvert the findings of Assessing Officer and CIT(A) by bringing any contrary material on record Decided against the Assessee.

Summary

Issues:
Assessment of Fringe Benefit Tax (FBT) for assessment years 2006-07 & 07-08.

Analysis:
1. The appeals were filed against the order of CIT(A)-I, Baroda for assessment years 2006-07 & 07-08. Both appeals were disposed of together due to identical issues.
2. The Assessee declared FBT at Rs. Nil but the tax audit report stated it at Rs. 2,87,55,560/-. The Assessee relied on a judgment of Gujarat High Court to argue non-liability for FBT.
3. The Assessing Officer held the Assessee liable for FBT under Chapter XII-H of the IT Act, as the case did not fall under the categories exempted by the High Court judgment.
4. The CIT(A) upheld the Assessing Officer's order, emphasizing the strict construction of deeming provisions and the Assessee's failure to prove non-liability for FBT.
5. The Assessee's appeal to the tribunal reiterated arguments based on the High Court judgment, while the Department supported the lower authorities' decisions.
6. The tribunal found no reason to interfere, as the Assessee had deposited FBT based on the tax audit report and failed to provide contrary evidence. The appeals were dismissed for both assessment years.

This detailed analysis covers the assessment of Fringe Benefit Tax for the mentioned assessment years, highlighting the arguments, decisions, and reasoning presented at each stage of the legal proceedings.