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TMI Blog2019 (10) TMI 517X X X X Extracts X X X X X X X X Extracts X X X X ..... e. We have given our thoughtful consideration to the submissions made by the assessee and the Ld. D.R. The law is well settled that levy of tax should be at the right hand. In the case in hand, we have held that supply of electricity to its employees at a concessional rate would be a perquisite for the employees. Under these circumstances, the revenue is at liberty to proceed against the assessee for non-deduction of tax at source in the event, if the employees have offered the benefit for taxation in their respective returns, the assessee would not be liable for the FBT. It would be tantamount to double taxation. We therefore, set aside the orders of the authorities below and restore the issue to the file of the A.O. for verifying whether the employees offered such benefit in their returns, if any. - Assessee grounds raised in this appeal are allowed for statistical purposes. X X X X Extracts X X X X X X X X Extracts X X X X ..... s 36 in respect of valuation of perquisites. Ld. Counsel submitted that it has been clarified that certain perquisites are taxed in the hands of the employees as part of salary income and the other fringe benefits are taxed in the hands of the employer by levying of FBT. However, where the perquisite is taxed in the hands of the employee, it is not taxed in the hands of the employer. Ld. Counsel has further taken us through the relevant provisions to buttress his contention that the supply of electricity on concessional rates is a perquisite and would be liable to be taxed in the hands of the employees of the assessee. 4. Per contra, Ld. D.R. supported the orders of the authorities below. Ld. D.R. strongly relied upon the impugned order. She further contended that the assessee failed to furnish evidence in support of its contention that the employees have offered the benefit for taxation and the assessee has deducted tax thereof. In the absence of such material evidence, the authorities below were justified in treating the same as fringe benefit. 5. We have heard the rival submissions, perused the materials available on record and gone through the orders of the authorities belo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an or scheme; (ii) "sweat equity shares" means equity shares issued by a company to its employees or directors at a discount or for consideration other than cash for providing know-how or making available rights in the nature of intellectual property rights or value additions, by whatever name called. (2) The fringe benefits shall be deemed to have been provided by the employer to his employees, if the employer has, in the course of his business or profession (including any activity whether or not such activity is carried on with the object of deriving income, profits or gains) incurred any expense on, or made any payment for, the following purposes, namely:- (A) entertainment; (B) provision of hospitality of every kind by the employer to any person, whether by way of provision of food or beverages or in any other manner whatsoever and whether or not such provision is made by reason of any express or implied contract or custom or usage of trade but does not include- (i) any expenditure on, or payment for, food or beverages provided by the employer to his employees in office or factory; (ii) any expenditure on or payment through paid vouchers which are not tran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v) sponsor a sportsman, being an employee; or (vi) organise sports events for employees, shall not be considered as expenditure for employees' welfare; (F) conveyance; (G) use of hotel, boarding and lodging facilities; (H) repair, running (including fuel), maintenance of motor cars and the amount of depreciation thereon; (I) repair, running (including fuel) and maintenance of aircrafts and the amount of depreciation thereon; (J) use of telephone (including mobile phone) other than expenditure on leased telephone lines; (K) [***] (L) festival celebrations; (M) use of health club and similar facilities; (N) use of any other club facilities; (O) gifts; and* (P) scholarships; (Q) tour and travel (including foreign travel). (3) For the purposes of sub-section (1), the privilege, service, facility or amenity does not include perquisites in respect of which tax is paid or payable by the employee or any benefit or amenity in the nature of free or subsidised transport or any such allowance provided by the employer to his employees for journeys by the employees from their residence to the place of work or such place of work to the place of residence." 7. Fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) as increased by the value of the furniture and fixtures in respect of the period during which the said accommodation was occupied by the assessee during the previous year, exceeds the rent recoverable from, or payable by, the assessee; (ii) the accommodation is taken on lease or rent by the employer, the value of the accommodation determined under sub-clause (ii) of clause (a) as increased by the value of the furniture and fixtures in respect of the period during which the said accommodation was occupied by the assessee during the previous year, exceeds the rent recoverable from, or payable by, the assessee; (d) in a case where the accommodation is provided by the employer in a hotel (except where the assessee is provided such accommodation for a period not exceeding in aggregate fifteen days on his transfer from one place to another), the value of the accommodation determined at the rate of twenty-four per cent of salary paid or payable for the previous year or the actual charges paid or payable to such hotel, whichever is lower, for the period during which such accommodation is provided, exceeds the rent recoverable from, or payable by, the assessee. Explanation 2.-For th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny vehicle provided by a company or an employer for journey by the assessee from his residence to his office or other place of work, or from such office or place to his residence, shall not be regarded as a benefit or amenity granted or provided to him free of cost or at concessional rate for the purposes of this subclause;] (iiia) 21[***] (iv) any sum paid by the employer in respect of any obligation which, but for such payment, would have been payable by the assessee; (iv) any sum payable by the employer, whether directly or through a fund, other than a recognised provident fund or an approved superannuation fund 22[or a Deposit-linked Insurance Fund established under section 3G of the Coal Mines Provident Fund and Miscellaneous Provisions Act, 1948 (46 of 1948), or, as the case may be, section 6C of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (19 of 1952)], to effect an assurance on the life of the assessee or to effect a contract for an annuity; 23[***] 24[ (vi) the value of any specified security or sweat equity shares allotted or transferred, directly or indirectly, by the employer, or former employer, free of cost or at concessional rate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his return of income a certificate from the hospital specifying the disease or ailment for which medical treatment was required and the receipt for the amount paid to the hospital;] (iii) any portion of the premium paid by an employer in relation to an employee, to effect or to keep in force an insurance on the health of such employee under any scheme approved by the Central Government 35-36[or the Insurance Regulatory and Development Authority established under sub-section (1) of section 3 of the Insurance Regulatory and Development Authority Act, 1999 (41 of 1999),] for the purposes of clause (ib) of sub-section (1) of section 36; (iv) any sum paid by the employer in respect of any premium paid by the employee to effect or to keep in force an insurance on his health or the health of any www.taxmann.com member of his family under any scheme approved by the Central Government 35-36[or the Insurance Regulatory and Development Authority established under sub-section (1) of section 3 of the Insurance Regulatory and Development Authority Act, 1999 (41 of 1999),] for the purposes of section 80D; (v) any sum paid by the employer in respect of any expenditure actually incurred by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dences, no fault can be found with the finding of the authorities below. Ld. Counsel for the assessee during the course of hearing prayed that the issue may be restored to the file of the A.O. who can verify this fact by conducting requisite enquiries. However, Ld. D.R. strongly opposed this submission and stated that assessee was provided with sufficient opportunity in this regard. It will give second innings to the assessee without any reasonable cause. We have given our thoughtful consideration to the submissions made by the Ld. Counsel for the assessee and the Ld. D.R. The law is well settled that levy of tax should be at the right hand. In the case in hand, we have held that supply of electricity to its employees at a concessional rate would be a perquisite for the employees. Under these circumstances, the revenue is at liberty to proceed against the assessee for non-deduction of tax at source in the event, if the employees have offered the benefit for taxation in their respective returns, the assessee would not be liable for the FBT. It would be tantamount to double taxation. We therefore, set aside the orders of the authorities below and restore the issue to the file of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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