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TMI Blog2016 (5) TMI 1083X X X X Extracts X X X X X X X X Extracts X X X X ..... he following grounds : 03. AO while passing the assessment order u/s.115WG of the Act, dt.28.03.2013, computed the value of fringe benefit by making an addition of Rs. 3,01,65,235/-. 04. Assessee challenged the action of the AO before the CIT (A) and contended that the expenditure on vehicles hired by the assessee are being used exclusively for official purpose and therefore it does not fall u/s.115WBF of the Act, to attract levy of FBT. CIT (A) granted part relief to the assessee by following the decision of this Tribunal in assessee's own case for A. Y. 2006-07 and consequently confirmed the FBT on the expenditure incurred for hiring of motor car for employees of the assessee. 05. Before us, Ld. DR has submitted that the CIT (A) in par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on.. Rs.64,27,392 ii. Motor Jeeps used for official purposes .. Rs.19,41,599 iii. Motor Car expenses at corporate office .. Rs. 5,86,625 Total (B) .. Rs.89,55,546 09. Out of the total addition made by the AO, CIT (A) found that the expenditure on hiring of motor-car for meetings, inspection etc., as well as expenses on owned motor car at corporate office are subjected to FBT in view of the decision of this Tribunal in assessee's own case for A. Y. 2006- 07. Accordingly the CIT (A) has confirmed the addition in the value of fringe benefit in para 7, as under : 1) Hiring for meetings, inspection, etc., .. Rs.1,03,19,767/- 2) Own expenses - Motor car expenses at corporate office .. Rs.5,86,625/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... go through the Explanatory Memorandum of the Finance Bill of 2005, which has been reproduced in 273 ITR (St.) 196 & 197, wherein it is explained as under:- "That the taxation of perquisites or fringe benefits provided by an employer to his employees, in addition to the cash salary or wages paid, is subject to varying treatment in different countries and these benefits are either taxed in the hands of the employees themselves or the value of such benefits is subject to a 'fringe benefit tax' in the hands of the employer. The rationale for levying a fringe benefit tax on the employer lies in the inherent difficulty in isolating the 'personal element' where there is collective enjoyment of such benefits and attributing the same directly to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... call it by a new name, namely, fringe benefit tax. The rate will be 30 per cent on an approximately defined base (2005) 273 ITR (St.) 56)". 9.5 Thus, it can be seen that what is intended to be taxed is a benefit attributable to employees collectively but the transport services for workers and staff are to be outside the tax net. In the case before us, items 1, 2 and 3 considered by the CIT(A) are for the purposes of carrying on the business activities of the assessee company by the agencies of the assessee company and it is only item 4, which is spent on the employees for attending the meetings, inspections and other official functions. From the reading of the provisions of section 115WB(2), it is clear that the benefits given to an emplo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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