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TMI Blog2018 (1) TMI 75X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s Govind Steel Co. Ltd and not in the hands of the assessee employee. We find that both the authorities below had grossly erred in making some addition towards the same on an estimated basis. Hence we have no hesitation in directing the ld AO to delete the entire addition made in this regard. - Decided in favour of assessee. - I.T.A No. 420/Kol/2016 - - - Dated:- 29-11-2017 - Shri M.Balaganesh, AM And Shri S.S.Viswanethra Ravi, JM For The Appellant : Shri A.K. Tibrewal, FCA For The Respondent : Shri Arindam Bhattacharjee, Addl. CIT ORDER Per M.Balaganesh, AM 1. This appeal by the assessee arises out of the order of the Learned Commissioner of Income Tax(Appeals)-23, Kolkata [in short the ld CIT(A)] in Appeal No.130/CIT(A)- 23/Ward-3(4)/2014-15/Kol dated 11.12.2015 against the order passed by the ITO, Ward-3(4), Kolkata [ in short the ld AO] under section 143(3) of the Income Tax Act, 1961 (in short the Act ) dated 24.12.2010 for the Assessment Year 2008-09. 2. The only issue to be decided in this appeal is as to whether the ld CITA was justified in confirming the addition of ₹ 1,24,574/- being 10% of overall expenses incurred by the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gation requiring certain payments to be made, and therefore, the same was taxable as perquisites in the hands of the assessee-appellant. 2. The AO has observed that the payments were made by the Company on behalf of the appellant, and this is not a matter of dispute. The AO has also not questioned the sources of the fund, and the assessee s explanation that the sources were from the Company M/s Govind Steel Co. Ltd. has also not been disputed. The AO has noticed that the assessee had paid bills worth ₹ 13,40,817/- from the credit card and has, on the basis of the nature of bills made a disallowance of 50%. 3. It is also seen that there AO has treated 50% of the expenses as personal in nature. This has been done in an ad hoc fashion, and the rationale leading to this certain percentage does not emanate from the findings of the order of the AO. 4. It has been pleaded during the course of the appellate proceedings that the Company in which the assessee-individual is the full-time director has paid the necessary FBT for the Assessment year 2008-09, and therefore the same ought not to be treated as perquisites in the hands of the appellant. Accordingly, the FBT r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt portion thereof to. explain the object behind levying fringe benefit tax. As indicated in the Said circular, the fringe benefit tax has been introduced as a surrogate tax on' employer with the objects of resolving the problems in, taxing some perquisites/fringe benefits in the hands of the employees in terms of section 17. Further, as explained in para No. 3.2 of the Circular, the scope of the term frinqe benefits provided is defined in section 115WB(1) to mean any consideration for employment provided by way of any privilege, service facility or amenity, directly or indirectly, provided by an employer, whether by way of reimbursement or otherwise, to his employees. Moreover, as clarified in the said circular while answering frequently asked question No. 15, fringe benefit is deemed to have been provided if the employer has incurred expenses for any of the purpose referred to in the relevant provisions and there is no requirement to segregate such expenses between those incurred for official purposes and personal purposes. It was further clarified while answering question No. 81 that when expenditure on running and maintenance of motor cars is liable to fringe benefit tax, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In summary, the addition to the extent of ₹ 1,24,574/- is sustained, and the balance is deleted. The appellant gets relief accordingly. 6. Aggrieved, the assessee is in appeal before us on the following grounds:- 1. That in the facts and circumstances of the case the Learned Commissioner of Income Tax (Appeals)-23, Kolkata, erred in arbitrary confirming the addition of ₹ 1,24,574 being 10% of the overall expenses incurred by the Assessee through credit card on behalf of its employer. 2. That the appellant craves leave to take additional grounds, and /or to amend or withdraw any of the foregoing grounds before, or at the time of hearing of this appeal. 7. We have heard the rival submissions. We find that the ld AR argued that the entire expenditure incurred through credit cards by the assessee for and on behalf of the company has been furnished before the ld CITA to the tune of ₹ 13,70,886/- which is included in the FBT return under the head Tour and Travel including foreign travel of ₹ 26,44,787/-. Accordingly it was argued that the expenditure incurred through credit card have duly been included in the FBT return filed by the com ..... X X X X Extracts X X X X X X X X Extracts X X X X
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