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TMI Blog1997 (7) TMI 198X X X X Extracts X X X X X X X X Extracts X X X X ..... bursed to the employees on account of transport was subject to deduction of tax at source. 2. The relevant facts are that the assessee, a Dutch Airlines, is operating from India International Airports like,Delhi,Calcutta, Mumbai and Chennai. It is employing various categories of employees who are being paid salaries in respect of which the assessee is obliged to deduct tax at source as provided under s. 192 of the IT Act. The assessee is also obliged to file Form No. 24, which is annual return of tax deducted at source before the prescribed authority, which in this case is Asstt. CIT,TDS Circle,New Delhi, giving thereunder the required details including deduction and payment of tax at source from the salaries paid to the employees. The assessee filed Form No. 24 for all the six years more or less within the prescribed time, barring as relating to financial year 1991-92 and 1992-93. For the sake of facility the relevant dates on which Form No. 24 was filed for the respective financial years are given below: Financial year Tax Deducted at source Date of filing the form. . Rs. . 1987-88 8,15,460 25-4-1988 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d recomputation of interest. Both the assessee and the Revenue are in appeals. 4. With regard to transportation reimbursement, the assessee s main contention in these appeals is that there was no justification for holding that the assessee defaulted in deducting tax in respect of payments made by it to its employees by way of reimbursement of transportation expenses, which have been made by it to all of its employees on the basis of ceiling imposed by it as a check measure varying between Rs. 350 to Rs. 750 p.m. depending upon grade of the employees. It is the claim of the assessee that transportation reimbursement is neither salary not an allowance constituting a part of salary, thus, coming within the ambit of s. 192 of the Act. Aggarwal submitted that the amounts are reimbursed to employees who actually incur some expenditure for commuting between residence and office. He submitted that the assessee has been operating in India since 1934 and has been regularly filing its annual return under s. 206 in the prescribed Form No. 24 and the AO had never objected to the amount reimbursed and claimed not forming part of the salary under s. 192 of the Act being by way of reimbursement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 TTJ (Bom) 401. He has also placed on record a copy of Mumbai Bench of the Tribunal order in the case of GlaxoIndia. It was, therefore, urged that the learned CIT(A) wrongly held the assessee liable to deduct tax at source on account of reimbursement of transportation expenses. He submitted that s. 201(1) is applicable only if the person responsible does not deduct or after deducting fails to pay tax. He submitted that for TDS under s. 192, the assessee was required to make a fair and bona fide estimate of salary of its employees. He refers to Madhya Pradesh High Court judgment in the case of Gwalior Rayon Silk Co. Ltd. vs. CIT (1983) 37 CTR (MP) 351 : (1983) 140 ITR 832 (MP). He submitted that on facts and in the background of the assessee, the estimate made by the assessee for the purpose of s. 192 was reasonable and bona fide and it is not even alleged that it was not so much less proved by the Revenue. 5. On the other hand, the learned Departmental Representative submitted that the amount paid represented transportation allowance, thus, partaking the character of salary since it is paid at flat rate to all the employees depending upon its grade and the assessee also did not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income of the employee for the relevant financial year. The assessee was, therefore, required to make an estimate of employees income a bona fide estimate undoubtedly as coming within the ambit of s. 192. The only issue to be seen is as to whether the assessee failed in its duty in making a bona fide estimate of income under the head salaries of its employees. To our mind, such failure cannot even be alleged much less established in the light of facts detailed above. We do not find any material on record by which it could be inferred that the appellant s conduct in not deducting tax at source on transportation reimbursement expenses was not bona fide. As a matter of fact various orders of the Tribunal, as also of High Courts, including in the case of ICICI, Indian Airlines Ltd. and GlaxoIndiasupport the case of the assessee that it was its bona fide belief that no tax was required to be deducted on the amount involved. The Delhi Bench order of the Tribunal in the case of NestleIndiais on the same facts and under similar circumstances again in favour of the assessee. In this order the Hyderabad Bench order of the Tribunal in the case of Dr. Reddy Laboratories, as was relied upon b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re by member airlines to the employees of other member airlines. It was submitted that in this very resolution it is provided that the employees did not acquire any vested right for this facility. The AO, however, took the view the benefit enjoyed by employees, courtesy another carrier, constitutes a perquisite as the benefit is derived directly from employment with the assessee and the facility is available only by virtue of his employment with the assessee. He also found the contention of the assessee that cost of these free tickets was nil, as irrelevant and immaterial. He, thus, worked out the value of perquisite on this account for different years on which the assessee was held liable to deduct tax at source. In appeal, the learned CIT(A) examined the matter at length and in depth when he took the view that benefit has not flown to the employees by way of concessional tickets from the assessee-employer but is from other airlines and, therefore, the assessee was not required to deduct tax at source. He also took the view that such a perquisite could be taxed only in the hands of employees as income from other sources, as held by Hon ble Supreme Court in the case of Emil Weber v ..... X X X X Extracts X X X X X X X X Extracts X X X X
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