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TMI Blog2013 (2) TMI 325X X X X Extracts X X X X X X X X Extracts X X X X ..... on a particular expenditure, it is considered as payment of income tax only on deemed income of the employee out of various expenditures incurred by the employer and hence, this is not relevant as to whether the employee has actually incurred those expenditures as intended by the employer in view of this fact that FBT was actually paid by the assessee-company on the impugned expenditure on uniform, washing allowance etc., the same cannot be considered as perquisites in the hands of the employees and therefore, there is no liability of the assessee-company to deduct TDS therefrom. See R & B Falcon (A) Pty Ltd. Versus Commissioner of Income Tax [2008 (5) TMI 2 - SUPREME COURT] - in favour of assessee. Non deduction of TDS on conveyance, maintenance, reimbursement expenditure (CMRE) to its employees every month based on their status, designation - Held that:- Employer is paying fringe benefit tax on CMRE cannot be ignored. Regarding this expenditure also this could not be shown or established by Revenue that FBT is not payable on this expenditure. This expenditure is also not incurred to fulfill any statutory obligation or to mitigate occupational hazards or fall in any other excl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid by the assessee-company on the impugned expenditure on uniform, washing allowance etc., the same cannot be considered as perquisites in the hands of the employees and therefore, there is no liability of the assessee-company to deduct TDS therefrom. 12. Now, we examine the applicability of CBDT Circular No.8 of 2005 dated 29-08-2005 (supra). From the relevant question of this Circular i.e., question No.74 as per which, the question was as to whether FBT is payable on a expenditure incurred on providing safety shoes or uniforms or equipments to the employees or for the purpose of reimbursement of washing charges. Reply was this that any expenditure incurred for meeting the employer s statutory obligation under the Employment Standing Order Act, 1948 fall within the scope of exclusion in the explanation to clause-E of sub-section-2 of 115WB and therefore, to the extent, such expenditure is covered by this exclusion, FBT is not required to be paid. In the present case, we have seen that the expenditure incurred by the assessee in respect of uniform, washing charges etc., is not a statutory obligation of the assessee-company and therefore, it is not covered by the exclusion cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above, this ground of the assessee is allowed. 6. Now coming to the appeal filed by the Revenue. 7. Ground No.1 which is common in all these appeals, except the amount, reads as under:- The ld. CIT(A) erred in law as well as facts of the case in deleting the order passed u/s 201(1) interest charged u/s 201(1A) of the I.T. Act of Rs.1,03,35,957/- and Rs.55,29,721/- respectively, for AY 2006-07 by the Assessing Officer even though during the course of verification it was noticed that the assessee company was paid conveyance, maintenance, reimbursement expenditure (CMRE) to its employees every month based on their status, designation. Despite the fact the payment of CMRE was taxable as salary and employer had not deducted TDS on the payment of CMRE was taxable as salary and employer had not deducted TDS on the same. 8. At the time of hearing both the parties agreed that the issue involved in these appeals is covered in favour of the assessee and against the Revenue by the order of the Tribunal in assessee s own case for the A.Y. 2009-10 vide ITA No.184/Ahd/2010 dated 16.11.2012 wherein following was held:- 18. We have considered the rival submissions and perused ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e necessary to be reimbursed to employees coming under the scheme is acceptable. Even though may checks and balances were in vogue like selection of the employees coming under this scheme, procedure for reimbursements online claim by the employees etc. is there, for any shortcomings committed by the employees, the employee cannot be found fault with, rather it is for the AO assessing the employees to find out the correctness of the claim and in case of any default to take appropriate action. The fact that the employer is paying fringe benefit tax on CME cannot be ignored. Thus, taking the overall picture of the CMRE, there is no hesitation to hold such reimbursement to employees coming under the scheme as not part of the salary and accordingly no TDS is attracted in the hands of the employer. Hence, I am of the view that the Assessing Officer was no justified by treating the assessee in default u/s 201(1) and 201(1A) of the Act. Hence, the assessing officer is directed to delete the same i.e. the levies u/s 201(1) and 201(1A). 9. Respectfully following the same, this ground raised by the Revenue in all the appeals is dismissed. 10. Second common ground, except the figure, take ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order of ld. CIT(A) while ld. D.R. relied on the order of the A.O. 14. After hearing both the parties and perusing the record, we find that ld. CIT(A), while giving relief to the assessee has observed as under:- During the period, when FBT was applicable, appellant considered reimbursements to employees under holiday home scheme to be liable to FBT under section 115WB(2)(G), i.e. expenditure for use of hotel, boarding and lodging facilities. During the FBT regime, expenditure borne or reimbursed by employer on traveling, accommodation and other items for holiday availed of by employee or any member of his family was prescribed as a fringe benefit for the purpose of section 17(2)(vi) by Rule 3(7)(ii), only in respect of those employers, who were not liable to pay fringe benefit tax under Chapter XII-H of the Act. Rule 3(7)(ii) was inserted as above through Income tax (Fourteenth Amendment) Rules, 2007 w.e.f. 1.4.2008. Thus, as far as A.Yrs.2008-09 and 2009-10 are concerned, appellant s contention that the holiday home scheme could not be considered as perquisite u/s 17(2)(vi) in the hands of employees is acceptable. For A.Yrs. 2006-07 and 2007-08, since expenditure incu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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