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TMI Blog2011 (5) TMI 679X X X X Extracts X X X X X X X X Extracts X X X X ..... nd circumstances of the case, the reliance placed by ld. CIT(A) on the judgment of Hon'ble Calcutta High Court in Jayshree Tea & Industries Ltd. & Ors. v. Union of India & Ors. (285 ITR 506) wherein the Hon'ble High Court adjudicated on section 115O relating to Dividend Distribution Tax is not related to Fringe Benefit Tax under section. 115WA. 2. The Department has also filed an affidavit of Deputy Commissioner of Income Tax, Shri Priyabrata Pramanik stating the reasons for the delay. At the time of hearing, ld. D.R. reiterated the contents of the affidavit and submitted that delay was due to a reasonable cause and the same should be condoned. The ld. A.R. stated that the reasons given for condonation of delay are not specific and are vague. However, at the same time, ld. A.R. submitted that he does not dispute the contents of the affidavit seriously and submitted Bench may consider the reasonableness of the delay. 3. We have considered the contents of the affidavit filed by the Department to explain the delay in filing this appeal before the Tribunal and also the submissions of the ld. representatives of the parties. Considering the contents of the affidavit, we are of the cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer deducted sum of Rs. 61,96,721/- being contribution to superannuation fund from value of fringe benefit and accordingly computed the fringe benefit tax liability on the balance amount of Rs. 5,33,56,149/-. Being aggrieved, the assessee filed appeal before the first appellate authority. 6. On behalf of the assessee, it was contended that as per Rule 8 of Income Tax Rules, 1962, only 40% of income from growing, manufacturing and sale of tea becomes chargeable under the Central Income Tax and remaining 60% is chargeable to Agricultural Tax by the concerned State Government, therefore, chargeability of fringe benefit tax should be @ 40% of the total expenditure, i.e. fringe benefit paid to the employees is assessable and not on entire expenses debited to Profit & Loss A/c. On behalf of the assessee, it was also contended that fringe benefit tax is in the nature of additional income-tax, which is paid by the employer with reference to value of fringe benefit, i.e. perquisite value. The assessee placed reliance on the decision of the Hon'ble Jurisdictional High Court in the case of Jayshree Tea & Industries Ltd. v. Union of India [2006] 285 ITR 506 (Cal.) and conte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kata High Court decided that the additional liability of income tax payable under section 115-O of the Act would be in the same proportion, i.e. 40% of the income distributed by way of profits to the shareholders. Ld. D.R. submitted that there is no similarity between section 115-O, vis-à-vis section 115WA of the Income Tax Act and the nature of charging fringe benefit tax is different and it is not a charge on the profit of the employer-assessee. Ld. D.R. submitted that similar issue has been considered by ITAT, Kolkata Bench vide order dated 7-1-2011 IT Appeal No. 556 (Kol.) 2010 in the case of Apeejay Tea Ltd. v. Dy. CIT [IT Appeal No. 556 (Kol.) of 2010, dated 7-1-2011]. The ld. D.R. submitted that the order of the Assessing Officer should be confirmed by allowing the appeal of the Department. 8. On the other hand, ld. A.R. justifies the order of ld. CIT (Appeals). He submitted that provisions of section 115-O and section 115WA are identical as under both sections, additional income-tax is charged. Ld. A.R. submitted that as per Rule 8 of Income Tax Rules, 1962, only 40% of the income is chargeable to Income Tax Act and the remaining 60% income of the assessee-company i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions. 10. The basic issue in this appeal is as to whether Rule 8 of Income Tax Rules applies to compute taxable value of fringe benefit in the case of assessee-company, which is engaged in the business of growing, manufacturing of tea and sale thereof. There is no dispute to the fact that as per Rule 8 of Income Tax Rules in the case of a tea company, only 40% of the total net income is liable to pay tax under the Income Tax Act at the prescribed rate and the balance 60% is to be considered as agricultural income, which is not liable to be taxed under the Income Tax Act, 1961 as it is within the domain of the State. The thrust of the submission of the ld. A.R. is that fringe benefit tax is an additional tax on the assessee-company and it is in pari materia with the provisions of section 115-O of the Income Tax Act and relying on the decision of the Hon'ble Jurisdictional High Court in the case of Jayshree Tea Industries Ltd. (supra) submitted that the additional tax liability will also be to the extent of 40% of the expenditure incurred by the assessee and as such fringe benefit tax is to be computed by taking into account 40% of the expenditure claimed by the assessee. We do not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore us. On the other hand, the similar issue has been considered by the ITAT, Kolkata Bench vide its order dated 07.01.2011 (supra) and we consider it prudent to refer para-7 of the said order, which is as under :- "7. We have carefully considered the submissions of the ld. Representatives of the parties and the orders of the authorities below. We have also considered the relevant provisions, i.e. Section 115WA, 115WB & 115WE of the Income Tax Act. We observe that an employer assessee is liable to pay Fringe Benefit Tax under section. 115WA of the Income Tax Act, in relation to Fringe Benefits provided by him to its employees. Sub-section (2) of section 115WA starts with a non obstante clause and states that notwithstanding that no income-tax is payable by an employer to its total income computed in accordance with the provisions of the Act, the tax on Fringe Benefits shall be payable by such an employer. Therefore, an employer is liable to pay Fringe Benefit Tax even when no income-tax is payable by an employer on his total income computed in accordance with the provisions of the Income Tax Act. Therefore, the contention of the ld. Authorized Representative for the assessee that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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