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TMI Blog2016 (5) TMI 62X X X X Extracts X X X X X X X X Extracts X X X X ..... er cent. of taxable value of fringe benefits as against 100 per cent. determined by the learned Assessing Officer and accordingly we direct the learned Assessing Officer to recompute the value of fringe benefits in accordance with rule 8 of the Income-tax Rules. - Decided in favour of assessee - I. T. A. Nos. 262 and 263/Kol/ 2013 - - - Dated:- 8-10-2015 - M. Balaganesh (Accountant Member) And S. S. Viswanethra Ravi (Judicial Member) For the Petitioner : Ajoy Kumar Gupta For the Respondent : Mrinal Kanti Biswas ORDER M. Balaganesh (Accountant Member) 1. These appeals of the assessee arise out of the order of the learned Commissioner of Income-tax (Appeals) in Appeal No. 139/CIT(A)-IV/2010-11 dated November 15, 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e-tax Rules. Accordingly, the assessee claimed that the same analogy should be made applicable for determining the taxable value of fringe benefits, i.e., only 40 per cent. of value of fringe benefits shall be taxable under section 115WC of the Act. However, the learned Assessing Officer did not accept the contentions of the assessee and proceeded to determine the taxable value of fringe benefits at 100 per cent. as against 40 per cent. declared in the return by the assessee. According to the learned Assessing Officer, the fringe benefit tax shall be payable irrespective of the fact whether any Income-tax is payable by the assessee under the provisions of the Act as prescribed in section 115WA of the Act. On the first appeal, the learned Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly irrespective of the fact of Income-tax liability on the assessee under the normal provisions of the Act. For the sake of convenience, the provisions of section 115WA are reproduced hereinbelow : 115WA. Charge of Fringe Benefit Tax.-(1) In addition to the income-tax charged under this Act, there shall be charged for every assessment year commencing on or after 1st day of April 2006, additional Income-tax (in this Act referred to as fringe benefit tax) in respect of the fringe benefits provided or deemed to have been provided by an employer to his employees during the previous year at the rate of thirty per cent. on the value of such fringe benefits. (2) Notwithstanding that no Income-tax is payable by an employer on his total in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is entitled to offer its taxable income in accordance with rule 8 of the Income- tax Rules. Similarly the taxable value of fringe benefits also could have to be determined only in accordance with rule 8 of Income-tax Rules thereon. We also find that the case law relied upon by the learned authorised representative is well placed. In Moran Tea Co. (I) Ltd. v. CIT reported in [2014] 51 taxmann.com 520 (Cal), the questions raised before the hon'ble jurisdictional High Court were as below : 1. Whether the Tribunal below committed substantial error of law in upholding the computation of the value of fringe benefit in the case of assessee engaged in the business of growing, manufacturing and sale of tea without having regard to the relev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7; 100 spent by the employer on account of fringe benefits made available to its employees. In that case, 40 per cent. of the aforesaid sum of ₹ 100 would also be includible in illustration B. Therefore, the question posed before us has really been answered by the illustration given by the apex court in the aforesaid judgment. It cannot be disputed that the amount of expenditure incurred by the assessee in extending fringe benefits to its employees was not solely for the purpose of business. The expenditure incurred is both for the purpose of business and for the purpose of agriculture. The submission made by Mrs. Gulgutia that the expenditure on account of fringe benefits has already been taken into account is not correct. The net pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and in favour of the assessee.' 4. Since the issue stands decided, the questions arising therefrom are answered as follows : Question No. 1 is in the negative and in favour of the assessee ; and Question No. 3 is in the negative and in favour of the assessee. 5. So far as question No. 2 is concerned, as it arises out of the reasoning given in the impugned order passed by the Tribunal on the issue decided, the same is redundant and need not be answered. 6. Therefore, the appeal is allowed. 10. We hold that what has been allowed as the business expenditure (i.e. the expenditure that are subjected to fringe benefit tax) is only to the extent of 40 per cent. thereon in accordance with rule 8 of the Income-tax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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