9911796707
TMI Blog2012 (9) TMI 62X X X X Extracts X X X X X X X X Extracts X X X X ..... on behalf of the assessee and Shri Anirudh Rai, CIT DR represented on behalf of the Revenue. 2. The assessee, in its appeal, raised the following grounds: "The grounds stated herein are without prejudice to each other. 1. That the order passed by the learned Commissioner of Income-tax (Appeals) ['CIT(A)'] is erroneous and bad in law. 2. Based on the facts and circumstances of the case, the learned CIT(A) has erred in stating that the issue involved in the assessment order passed by the Assessing Officer does not constitute a mistake apparent from record under section 154. 3. The learned CIT(A) erred in bringing to tax the ESOP expenditure under clause (a) of section 115WB(I), without appreciating the fact that ESOP expenditure is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act determining the taxable fringe benefits at Rs.9,26,41,272/-. While computing the taxable fringe benefits, the Assessing Officer made an addition of Rs.7,41,51,630/- towards privilege provided free of cost falling under the purview of section 115WB(1)(a). 4. The assessee filed petition under section 154 against the assessment order passed under section 115WE(3) of the Act for rectification of the assessment order and deletion of addition of Rs. 7,41,51,630/- made under section 115WB(1)(a) of the Act. The Assessing Officer rejected the petition filed by the assessee under section 154 against which the assessee filed an appeal before the Commissioner of Income Tax (Appeals) contending that the Assessing Officer erred in subjecting ESOP ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 115WB(1) till the assessment year 2008-09. Therefore, the counsel submits that it is a mistake apparent from record in bringing the ESOP expenditure to fringe benefits tax during the assessment year 2007-08 and hence the Assessing Officer should have rectified the assessment order by deleting the addition made towards ESOP expenditure under section 115WB(1)(a) of the Act. 7. The counsel for the Revenue submitted that there is no mistake apparent from record in computing the taxable fringe benefits and it is a conscious decision taken by the Assessing Officer to bring ESOP expenditure to fringe benefits tax. Therefore, he submits that the Commissioner of Income Tax (Appeals) rightly dismissed the appeal of the assessee. 8. We have he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mputed and provided the value of such benefits passed on to the employees free of cost. Therefore, the value of such benefits is liable to FBT. The assessee company has reimbursed the cost of deputing the Director and employees towards their salary and cost of housing. Apart from above, the payments towards ESOP of the Director and other employees amounting to Rs.7,41,51630/-has also been paid by the assesse company. Section 115WB(1)(a) reads as: (a) any privilege, service, facility or amenity, directly or indirectly. provided by an employer, whether by way of reimbursement or, otherwise, to his employees (including former employee or employees); Though the securities are listed at USA, this privilege or benefit is being provided directly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 and not from the assessment year 2007-08. Hence, it is a mistake apparent from the record in subjecting the ESOP expenditure to fringe benefits tax for the assessment year 2007-08. The Assessing Officer, by his order dated 08.03.2010 passed order under section 154 read with section 115WL, rejected the petition for rectification filed by the assessee stating that privilege or benefit extended free of cost to the employees is a taxable fringe benefit. While holding so, the Assessing Officer referred to the clarifications issued by the CBDT in its Circular No. 8 of 2005 dated 29.08.2005 and Circular No. 9 of 2007 dated 20.12.2007. 10. Subsequently, the assessee filed one more rectification petition on 11.02.2011 for rectification of the ord ..... X X X X Extracts X X X X X X X X Extracts X X X X
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