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TMI Blog2012 (9) TMI 234X X X X Extracts X X X X X X X X Extracts X X X X ..... o.4244/Del/2010 - - - Dated:- 20-7-2012 - SHRI I.C. SUDHIR, AND SHRI T.S. KAPOOR, JJ. Appellant by : Shri Pawan Sharma, Advocate Ms. Madhavi Souroop. Respondent by : Shri S.K. Upadhaya, Sr. D R. ORDER PER TS KAPOOR, AM: This is an appeal filed by the assessee against the order of Ld CIT(A) dated 15.3.2010. The grounds raised by the assessee are as under:- On the facts and in the circumstances of the case and in law: 1. The learned CIT (Appeals) has erred in passing order dated March 15, 2010 without application of mind and in contravention of the facts on record by holding that payment of US taxes and life insurance premium by the employer on behalf of appellant cannot be categorized as a non-monetary payment w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me of Rs.10,56,46,949/-. The assessment was made u/s 143(3) on 29.12.2008. During course of assessment proceedings, it was noted that assessee had drawn salary from M/s General Electric International Inc. (GEII) and Genpact US holdings. The salary received from GE II was net of tax and tax on salary income was borne by the employer. The assessee had claimed the tax paid by employer as non monetary perquisite and therefore had claimed it as exempt u/s 10(10CC) of the Act. The Assessing Officer confronted the assessee and asked him to clarify as to how he has treated the taxes borne by the employer as non monetary. In his reply, the Ld AR replied vide its reply dated 18.12.2008 as under:- "The taxes amounting to Rs.3,588,177/- have been co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f RBF Rig Corpn. LIC (RBFRC) v. Assistant Commissioner of Income-tax (297 ITR 228), wherein, after analyzing the entire gamut of issues revolving around the subject matter in sufficient detail, it has been categorically held that the tax paid by the employer on behalf of the employee (viz., tax borne by the employer) is a non-monetary perquisite, and consequently, tax on such nonmonetary perquisite is not taxable in employee s hands, in view of Section 10(10CC) of the Act. The abovementioned case directly applies to the assessee's case, and therefore, the taxes borne by the employer should be treated as non-monetary perquisites and the tax paid by the employer on such perquisites need not be grossed-up in terms of section l0 (l0CC) of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m of treating all perquisites of Life Insurance premium and System Tax Adder as non monetary perquisites but inadvertently added the same at the time of computing the income of the appellant. 2. That the Act levies a charge on income. A person is liable to tax in respect of the income chargeable to tax. The onus of discharging the tax liability is on the person whose income is liable to tax. Hence, there may be instances where a person received whether by contract or custom income free of tax, in such a situation tax paid by the employers constitutes a perquisite in the hands of employee u/s 17(2)(iv) of the Act being an obligation of the employee met by the employer. The said sum hence is taxable in the hands of the employee under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. The Ld AR, at the out set, argued that the matter is covered by the Special Bench decision of the ITAT, New Delhi in the case of RBF Corporation LLC (supra). The Ld AR further argued that in the above case exactly the same issue has been decided and the judgment is in favour of the assessee. In this respect he took us to page 150 of that judgment where provisions of section 10(10CC) along with section 17(2)(iv) were reproduced. He further took us to pages 162 to 179 of the judgment where the issue had been dealt in details. He further argued that Ld. CIT(A) in the concluding paragraph had adjudicated on US taxes life insurance premium instead of taxes borne by employer. 6. The Ld DR, on the other hand, argued that assessee was n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not provided for by way of monetary payment within the meaning of clause (2) of section 17, the tax on such income actually paid by his employer at the option of the employer on behalf of such employee not withstanding any thing contained in section 200 of the Companies Act, 1956. Further section 17(2)(iv) reads as under:- i) perquisite includes ii) --- iii) --- iv) Any sum paid by the employer in respect of any obligation which but for such payment would have been payable by the assessee. 9. From the above combined reading of both sections, it can be concluded that taxes borne by the employer were obligation which but for such payments would have been payable by the assessee and therefore these taxes squarely fit in the definitio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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