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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 ..... d against the order of assessment framed by the learned Assessing Officer under section 115WE(3) of the Income-tax Act, 1961 (hereinafter referred to as the "Act"). As the issues involved are identical in nature, both the appeals are taken up together and disposed of by a common order for the sake of convenience. 2. Shri Ajoy Kr. Gupta, FCA, the learned authorised representative argued on behalf of the assessee and Shri. Mrinal Kanti Biswas, Joint Commissioner of Income-tax, the learned Departmental representative argued on behalf of the Revenue. 3. The only issue to be decided in this case is as to whether the assessee is entitled to avail of the concessional rate of tax prescribed under rule 8 of the Income-tax Rules to determine the ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e learned authorised representative argued that the taxable value of fringe benefits should be computed in accordance with rule 8 of the Income-tax Rules only as fringe benefit tax is charged under section 115WA of the Act which admittedly is part of the Income-tax Act, 1961. When the taxable income under the provisions of the Act are to be determined at 40 per cent. of profits, the same analogy should equally be made applicable for determining the taxable value of fringe benefits. The learned authorised representative argued that the issue is covered by the decision of the jurisdictional High Court in the case of Moran Tea Co. (I.) Ltd. v. CIT reported in [2014] 51 taxmann.com 520 (Cal) vide order dated September 1, 2014. In response to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ake it very clear that fringe benefit tax is also charged as per the provisions of the Income-tax Act. Hence it is incorrect to argue that it would operate independently away from Income-tax Act read with rules thereon. It is pertinent to note that the Legislature in its wisdom had not provided for the non obstante clause in the charging section 115WA of the Act to give an independent and overriding operation. The charging section 115WA of the Act only states that an assessee-employer shall pay fringe benefit tax whether or not the employer-assessee pays Income-tax under the normal provisions of the Act. The employer-assessee may be exempt from payment of Income-tax due to allowance of various exemptions/deductions under section 10A/10B/10A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in holding that there was no similarity between the provisions of section 115WA vis-a-vis section 115-O of the Act. 3. Whether the Tribunal below committed substantial error of law in upholding the inclusion of expenses in the taxable value of fringe benefit in the case of an assessee engaged in the business of growing, manufacturing and sale of tea although expenses included were not allowed as deduction when computing the total income under the Act ?" 9. Their Lordships of the Calcutta High Court while deciding the questions raised hereinabove held as below : "3. We find the questions arose out of the issue decided by the Tribunal regarding the applicability of rule 8 in the matter of arriving at the value of fringe benefit for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the net profit and loss has to be worked out which shall be chargeable to tax. Once this is done the expenditure on account of fringe benefits would automatically stand reduced to 40 per cent. as would appear from illustration B in the case of Doom Dooma (supra). The Revenue is interested in contending as would appear from the impugned orders that the expenditure on account of fringe benefit cannot be reduced to 40 per cent. for the purpose of computing fringe benefit tax. If that is done, the result would be that the agricultural income itself would become liable to tax, which is not permissible under sub-section (1) of section 10 of the Income-tax Act. The provisions contained in Chapter XII-H of the Income-tax Act have to be read subjec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decision of this Tribunal rendered in the assessee's own case against the assessee for the assessment year 2006-07 vide order dated May 6, 2011, is no longer relevant as the issue adjudicated by this Tribunal had been overruled by the jurisdictional High Court in the case mentioned hereinabove. 12. Hence in view of the aforesaid facts and circumstances and respectfully following the decision of the jurisdictional High Court, we hold that the assessee-employer shall be entitled to claim relief at 40 per 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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