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TMI Blog2012 (8) TMI 255X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. .10,70,86,818/- have not been offered to FBT by the Appellant despite the fact that these expenses have already been suo-motu offered to tax by the Appellant u/s. 115WB(2)(Q) and consequently has erred in taxing 20% of the above amount liable to FBT. 3. The Learned CIT(A) has erred in not appreciating the fact that FBT is leviable even on expenses which are not attributable to employees. 4. The Learned CIT(A) has erred in not appreciating the fact that, FBT is payable only on expenses which results in benefits to employees and not on the entire expenses and the AO has erred in levying FBT even on expenses which do not result in any benefits to employees. 5. The Learned CIT(A) has erred in not appreciating the fact that no interest ought to be leviable u/s. 115WJ. 6. The Learned CIT(A) has erred in not appreciating the fact that penalty proceeding u/s.271(1)(c) ought not to have been initiated. He further erred in holding that this ground is premature." 2. Brief facts apropos this case are that the assessee company had filed its e-return of Fringe Benefit Tax (in short 'FBT') at Rs. .3,12,92,676/- under Section 115 WD on 7-11-2007, along with the return of i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ort and FBT report. The learned CIT(A) called for the remand report from the Assessing Officer on the entire documents and evidence filed before him. In compliance thereof, the Assessing Officer has submitted his remand report vide letter dated 1-2-2011 (copy of which has been placed in the paper book at page 145 & 146). The appeal was thus, heard on merits after taking into consideration all the documents furnished before the CIT(A) as well as before the Assessing Officer and also in terms of remand report submitted by the Assessing Officer. So far as the issue of passing of ex-parte order is concerned, there is no grievance, as the CIT(A) has already considered the additional evidence after obtaining the remand report. 3.1 On the merits, so far as the addition of FBT on 'telephone expenses' at Rs. .50,83,488/-, the CIT(A) confirmed the finding of the Assessing Officer, despite the assessee's explanation that firstly, on identical accounting policies, in the preceding assessment year 2006-2007, this issue has been accepted by the Assessing Officer and secondly, on merits also the FBT levied on various items are not covered by the definition given in Section 115WB (2)(J). Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ravelling and conveyance, he submitted that there has been double addition by the Assessing Officer as he proceeded with wrong presumption of facts. To highlight this fact, he pointed out that total FBT offered under the head 'tours and travel expenses' amounted to Rs. .12,20,72,623/- and not Rs. .6,43,96,182/- and the amount disallowed by the Assessing Officer at Rs. .10,92,01,546/- is in fact part of the same amount. In support of this, he referred to the statement appearing at page 2 & 3 of the paper book which were filed before the authorities below. Based on these statement, the reconciliation has been explained by the Ld. Counsel in the following manner :- Tour & Travel Expenses -Addition in value of Rs. 10,70,86,818/- taxed @ 20% for Rs. 2,14,17,364/- 1. Debit to P & L A/c.(Para 3 of AO order) 17,14,82,976 2. As per AO, Amount offered by assessee for FBT Towards repair & running of motor cars Local conveyance Total 3,97,23,088 2,46,73,094 6,43,96,182 3. Mistake in AO's working-(Refer reconciliation statement at page 2 of paper book Refer Reconciliation Statement at Page 2 of the paper book. Total: 11,77,308 9,41,228 21,18,536 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the head telephone expenses amounted to Rs. .4,98,09,000/-, whereas the expenditure offered for FBT was Rs. .2,43,91,558/- only and, therefore, balance amount is treated as FBT liable for tax. The details of the entire telephone expenses debited to the profit loss account for sum of Rs. .4,98,09,000/- and the amounts which have been offered for the purpose of FBT, are given herein under :- Sr.No. Items AY 2007-2008 Total Expenses debited to profit and loss account Offered for the purpose of FBT Not offered for the purpose of FBT 1 Postage 142,620 - 142, 620 2 Telecom expenses 9,996,828 9,996,828 - 3 Mobile expenses 13,526,905 13,526,905 - 4 Fax Telecom Expenses 867,825 867,825 - 5 Email Telecom Expenses (broad Band) 234,972 - 234,972 6 Lease Line/ISDN/B with charges 2,478,993 - 2,478,993 7 Courier 22,561,327 - 22,561,327 Total 49,809,470 24,391,558 25,417,912 From the above, it can be inferred that the Assessing Officer has also taken the amount debited under the head 'postage', 'email', 'lease line' and 'courier' to be liable for FBT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 95,786 115WB(2)(F) iv) Local travel & transport 3,35,23,113 3,35,23,113 115WB(2)(Q) v) Local travelling expenses allowed 6,07,49,451 6,07,49,451 115WB(2)(Q) vi) Local travelling expenses disallowed 3,784 - - vii) International travel & transport 71,36,637 71,36,637 115WB(2)(Q) From the above, it would be seen that the assessee has offered sum of Rs. .10,92,547/- under Section 115WB(2)(Q) and others under different clauses, which aggregates to Rs. .12,20,72,623/-. If the Assessing Officer would have carefully perused the said statement filed before him, then definitely he would not have come to the conclusion that there is a difference of Rs. .10,70,86,794/-. The difference, stands fully reconciled from the chart given in the foregoing paragraphs 4.2 given at page 6 & 7 of this order. Thus, on these facts, we hold that there was no reason to make any addition of Rs. .10,70,86,818/- as the same stands covered under the fringe benefit tax offered by the assessee. Thus, the contention of the Ld. Senior Counsel that it amounts to double taxation, is factually correct. In view of the above facts, no addition is called for on this score an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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