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TMI Blog2015 (6) TMI 557X X X X Extracts X X X X X X X X Extracts X X X X ..... ees and vehicle expenses. 3. Rival contentions have been heard and record perused. There was a search and seizure operation u/s.132 of the Act was carried out at the residential and business premises of M/s Dimple Drums & Barrels Pvt. Ltd. group and its group associates concerns. While framing assessment u/s.153A, the AO disallowed salary paid to the employees who are stated to be assessee's family members. It was submitted before the AO that in regular assessments, there was disallowance of 50% of the salary so paid against which no further appeal was filed against the disallowance. However, the AO did not accept assessee's contention on the plea that employees are not attending office, no appointment letter was issued in the name of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowed by the AO which was accepted by the assessee and no further appeal was made before any Court. Further, the AO has asked the assessee company to produce these female members for verification, but no one was produced. Thus, the AO on the basis of the reasons given in the assessment order, disallowed the salary on the plea that expenditure was incurred for non-business purpose. The findings recorded by lower authorities have not been controvered by ld. AR by bringing any positive material on record. Accordingly, we do not find any reason to interfere in the findings recorded by lower authorities to the effect that no services were rendered by these female employees. In the statement so recorded during search it was admitted that no serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that once fringe benefit tax is levied on such expenses as has been done in the present case, it follows that the same are treated as fringe benefits provided by the assessee as employer to its employees and the same have to be appropriately allowed as expenses incurred wholly and exclusively incurred by the assessee for the purpose of its business. The Tribunal in the case of Hansraj Mathuradas, ITA No.2397/Mum/2010 (A.Y.2006-07), vide order dated 16-9-2011, held as under :- "17. We have heard the arguments of both the sides and also perused the relevant material on record. The learned counsel for the assessee has taken us through the CBDT Circular No. 8/2005 dated 29-08-2005 giving explanatory notes on the provisions relating to fringe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the Board explaining the provisions relating to fringe benefit tax thus makes it clear that fringe benefit tax is levied on the expenses incurred by the employer irrespective of whether the same are incurred for official or personal purposes. In our opinion, once fringe benefit tax is levied on such expenses as has been done in the present case, it follows that the same are treated as fringe benefits provided by the assessee as employer to its employees and the same have to be appropriately allowed as expenses incurred wholly and exclusively incurred by the assessee for the purpose of its business. In that view of the matter, we delete the disallowance made by the AO and confirmed by the learned CIT(Appeals) out of conveyance and telep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deleted by the Tribunal after having the following observations :- "5. We find that as per the provisions of section 145A of the Income-tax Act, 1961, the Excise Duty on purchases has to be included in sales. Alternatively, the purchases and sales have to be taken at gross value and whatever credit is left in the Modvat account that would form part of. the closing stock. In the present case, the Excise Duty benefit available on purchases amounts to Rs. 4,13,34,976/-, whereas the Excise Duty paid on sales was to the tune of Rs. 3,22,09,770/- and thus the balance amount of Rs. 93,25,206 was available in the Modvat account. As per the provisions of section 145A of the Act, the amount of Rs. 4,13,34,976/- is includible in the purchases and sim ..... X X X X Extracts X X X X X X X X Extracts X X X X
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