Axtel Industries Ltd., Panchmahal V. The ACIT, Panchmahal Circle, Godhra

ITA 1113/AHD/2014

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 9203 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-02-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 21-02-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 15-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard
• Section: 2

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD . . , , BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND SHRI MAHAVI R PRASAD, JUDICIAL MEMBER . / I.T.A. NO . 1113/AHD/2014 ( / ASSESSMENT YEAR : 2006 - 07 ) AXTEL INDUSTRIES LTD. PLOT NO. 43/1, VILLAGE NURPURA P.O. BASKA, TA. HALOL DIST. PANCHMAHAL 389350 GUJARAT / VS. ACIT, PANCHMAHAL CIRCLE, GODHRA. ./ ./ PAN/GIR NO. : AACCA 3227 E ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI MILIN MEHTA, A.R. / RESPONDENT BY : SHRI JAMES KURIAN, SR. D.R. / DATE OF HEARING 21/02/2017 / DATE OF PRONOUNCEMENT 23 / 02 /201 7 / O R D E R PER SHRI MAHAVIR PRASAD, JUDICIAL MEMBER : THIS APPEAL HAS BEEN PREFERRED BY THE APPELLANT COMPANY IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS ) - I , BARODA, DATED 17/01/2014 F OR THE ASSESSMENT YEAR (AY) 2006 - 07 AND FOLLOWING GROUNDS HAVE BEEN TAKEN: I. THE LD. CIT(A) ERRED IN FACT AND IN LAW IN CONFIRMING THE ACTION OF AO IN ASSESSING THE FRINGE BENEFIT VALUE OF EMPLOYEE WELFARE ITA NO. 1113/AHD/2014 AXTEL INDUSTRIES LTD. VS. ACIT ASST.YEAR 2006 - 07 - 2 - U/S.115WB(2) (E) AT RS.6,48,350/ - AGAINST THE RETURNED VALUE OF RS.58,211/ - . II. THE LD. CIT(A) ERRED IN FACT AND IN LAW IN CONFIRMING THE ACTI ON OF AO IN ASSESSING VALUE OF CONVEYANCE, TOUR AND TRAVEL U/S.115WB(2)(F) AT RS.13,51,666/ - AGAINST THE RETURNED VALUE OF RS.11,30,068/ - . III. THE LD. CIT(A) ERRED IN FACT AND IN LAW IN CONFIRMING THE ACTION OF AO IN ASSESSING VALUE OF USE OF HOTEL, BOARD ING AND LODGING U/S. 115WB(2)(G)AT RS.1,22,777/ - AGAINST THE RETURNED VALUE OF RS.1,10,734/ - . 2 . THE FACTS OF THE CASE ARE THAT IN THIS CASE, THE FRINGE BENEFIT RETURN WAS FILED ON 28/12/2006 UNDER E - FILLING WHICH WAS PROCESSED & FRINGE BENEFIT S SHOWN WER E ACCEPTED. AS THERE WAS ESCAPEMENT IN FRINGE BENEFIT S THE ASSESSMENT WAS RE - OPENED AND ISSUED NOTICE U/S. 115WH OF THE ACT. SAME WAS DULY COMPLIED WITH BY THE APPELLANT . 3 . IN RESPONSE TO THE SAID NOTICE U/S. 115WH OF THE ACT, IT WAS EXPLAINED BY THE ASSESSEE THAT THE RETURN OF FBT FILED ON 28/12/2006 MAY BE TREATED AS FILED IN RESPONSE TO THE NOTICE U/S. 115WH. 4 . ON VERIFICATION IT WAS FOUND THAT WHILE COMPUTING THE FRINGE BENEFIT, CERTAIN EXPE NSES WERE NOT CONSIDERED BY THE ASSESSEE FOR PAYMENT OF FRINGE BENEFIT TAX. THESE FACTS WERE BROUGHT TO THE NOTICE OF THE ASSESSEE & REQUESTED TO EXPLAIN AS TO WHY FILING OF RETURN OF FRINGE BENEFIT, EXPENSES LIABLE FOR FRINGE BENEFIT TAX WERE NOT FULLY CO NSIDERED FOR PAYMENT OF FBT. IN RESPONSE TO IT, THE ASSESSEE COMPANY HAS FILED ONE ITA NO. 1113/AHD/2014 AXTEL INDUSTRIES LTD. VS. ACIT ASST.YEAR 2006 - 07 - 3 - LETTER DATED 08/12/2011 SHOWING DETAILS OF FRINGE BENEFIT S AT THE TIME OF FILING OF THE FRINGE RETURN. 5 . LD. AO STATED THAT I HAVE GONE THROUGH THE SUBMISSION FILED BY THE ASSESSEE DATED 08/12/2011. IN THE SUBMISSION, THE ASSESS EE HAS GIVEN DETAILS , WHY CLAIM O F VARIOUS EXPENSES, SOME PART WERE EXCLUDED. T HE CONTENTION OF THE ASSESSEE WAS NOT ACCEPTED AS THE ASSESSEE HAS EXCLUDED PART OF THE EXPENSES THOUGH SAID EXPENSES WE RE LIABLE FOR FBT. THE DET AILS OF FRINGE BENEFIT WHICH WERE EXCLUDED WHILE FILING THE RETURN FOR FRINGE BENEFIT HAS BEEN GIVEN BELOW. NATURE OF EXPENDITURE AMOUNT DETAILED TO P&L A/C ON WHICH FBT LEVIED AMOUNT DEBITED TO P&L A/C ON WHICH FBT SHOULD BE LEVI ED DIFFERENCE VALUE OF FRINGE BENEFITS (IN RS.) EMPLOYEE S WELFARE 115 WB (2)(E) 58,211/ - 1,97,305/ - (STAFF & LABOUR WELFARE SCH.M) 5,09,256/ - (FOOD & BEV. SCH. N, OTHER OFFICE EXP.) 6,48,350/ - 1,29,670/ - CONVEYANCE TOUR & TRAVEL 115 WB(2)(F) 11,30,068/ - 11,73,209/ - (CONEY. & EH. SCH. N) 10,76,194/ - 13,51,666/ - 2,70,333/ - USE OF HOTEL, BOARDING AND LODGING 115 WB(2)(G) 1,10,734/ - 2,33,511/ - (HOTEL & DA SCH. L) 1,22,777/ - 24,555/ - TOTAL 21,22,793/ - 4,24,558/ - ITA NO. 1113/AHD/2014 AXTEL INDUSTRIES LTD. VS. ACIT ASST.YEAR 2006 - 07 - 4 - AS THE ABOVE FRING E BENEFIT AMOUNT OF RS.4,24,558/ - WAS NOT INCLUDED BY THE ASSESSEE AT THE TIME FILING OF RETURN, THE SAME WAS ADDED TO THE RETURNED FRINGE BENEFIT. PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE ACT READ WITH SECTION 115WL FOR FURNISHING INACCURATE PARTICULARS OF FRINGE BENEFIT IS INITIATED. TOTAL VALU E OF THE FRINGE BENEFIT SHOWN - RS. 4,98,735/ - BY THE ASSESSED IN THE FGBT RETURN ADDITION AS DISCUSSED ABOVE - RS. 4,24,558/ - TOTAL FRINGE BENEFIT ASSESSED - RS. 9,23,293/ - 6 . AGAINST THE SAID ORDER ASSESSEE S COMPANY PREFERRED FIRST STATUTORY APPEAL BEFORE THE LD. CIT(A) WHO DISMISSED THE APPEAL OF THE APPELLANT. 7 . IN THIS CASE LD. A.R. STATED THAT EX PARTE ORDER HAS BEEN PASSED WITHOUT GIVING PROPER OPPORTUNITY OF BEING HEARD BY THE LD. CIT(A) AND IT WAS FURTHER STATED THAT EXPENDITURE OF RS. 5,09,256/ - ON ACCOUNT OF FOOD AND BEVERAG E FOR EMPLOYEES SPECIALLY EXCLUDED FROM THE SCOPE OF FRINGE BENEFIT EXPENSE U/S. 115WB(2)(B)(I). SO FAR ASSESSEE CONTENDED THAT ASSESSEE FRINGE BENEFIT TAX CONCERNED; IT WAS SPENT ON THE STAFF WHEN THEY GO OUT OF STATION FOR INSTALLATION OF MACHINE ETC. FO R BUSINESS PU RPOSE . ITA NO. 1113/AHD/2014 AXTEL INDUSTRIES LTD. VS. ACIT ASST.YEAR 2006 - 07 - 5 - 8 . LD. AR ALSO CITED AN ORDER OF SARASWATI INDUSTRIAL SYNDICATE LTD. VS. JOINT COMMISSIONER OF INCOME - TAX [2010] 132 TTJ 68 (CHANDIGARH) (UO) IN THIS CASE MATTER WAS SENT BACK TO THE FILE OF AO, S INCE THIS CASE HAS BEEN PASSED EX PART E. THEREFORE WE SET ASIDE THE ORDER OF THE LD. CIT(A). WE REMAND THIS MATTER BACK TO THE FILE OF CIT WHO WILL DECIDE THE MATTER AFRESH AFTER GIVING PROPER OPPORTUNITY OF BEING HEARD. 9 . IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. THIS ORDER PRONOUNCED IN OPEN COURT ON 23 / 0 2 /201 7 SD/ - SD/ - . . ( ) ( ) ( N.K. BILLAIYA ) ( MAHAVIR PRASAD ) ACCOUNTANT MEMBER JUDICIAL MEMBER A HMEDABAD; DATED 23 / 0 2 /20 17 PRITI YADAV, SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) - I, BARODA. 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD TRUE COPY