ITO, Wd, 2(1), Jalgaon V. Tapi Irrigation Development Corporation, Jalgaon

ITA 1251/PUN/2009

• Counselvise Citation: 125124514 RSA 2009
• Duration Of Justice: 1 year(s) 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-05-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 30-10-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S C SHIVGANDE

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JM AND SHRI G.S. PANNU, AM. I.T.A. NO. 1251/PN/2009 : A.Y. 2006-07 I.T.O. WARD 7(1) JALGAON .. APPELLANT VS. TAPI IRRIGATION DEVELOPMENT CORPN. SINCHAN BHAVAN AKASHWANI CHOWK JALGAON PAN AALT 0058 M .. RESPONDENT APPELLANT BY: SHRI S.C. SHIVGANDE RESPONDENT BY: NONE ORDER PER SHAILNDRA KUMAR YADAV, JM THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF THE CIT (A)II NASIK DATED 13-8-2009 FO R A.Y. 2006-07 ON THE GROUND THAT THE CIT(A) ERRED IN ESTIMATING THE AMOUNT OF EXPENSES INCURRED UNDER TH E HEAD TELEPHONE AND MAINTENANCE OF GUEST HOUSE @ 5% EACH, AS AGAINST 40% AND 20% RESPECTIVELY, ESTIMATE D BY THE ASSESSING OFFICER. 2. THE ASSESSEE IS A GOVERNMENT CORPORATION SET UP UNDER TIDC ACT 1990 WITH A MAIN OBJECT OF CONSTRUCT ION OF DAMS, CANALS AND OTHER IRRIGATION PROJECTS EN-RO UTE RIVER TAPI AND SUPPLY OF WATER TO FARMERS, HOUSEHOL DS, ITA NO. 1251/PN/2009 TAPI IRRIGATION DEVT. CORPN A.Y. 2006- 07 2 INDUSTRIAL AND COMMERCIAL USERS IN MAHARASHTRA. FOR THE A.Y. 2006-07, THE ASSESSEE FILED RETURN OF INCO ME ON 27-11-2006. AS PER THE SAID RETURN THE TAXABLE FRIN GE BENEFIT WERE SHOWN AT NIL. THE ASSESSING OFFICER NO TICED THE OPINION OF THE AUDITORS THAT THE ASSESSEE WAS N OT LIABLE TO FRINGE BENEFIT TAX AS THE CORPORATION WAS WHOLLY HELD BY GOVERNMENT OF MAHARASHTRA AND THE ENTIRE ST AFF WAS WORKING ON DEPUTATION BASIS. NOT BEING SATISFI ED WITH THE ASSESSEES SUBMISSIONS, THE ASSESSING OFFI CER COMPLETED THE ASSESSMENT DETERMINING THE TAXABLE FR INGE BENEFIT ON ESTIMATE BASIS. HE ACCORDINGLY ESTIMATED THE FRINGE BENEFITS AT 20%. ON APPEAL, THE CIT(A) AFTER CONSIDERING THE SUBMISSIONS MADE ON BEHALF OF THE ASSESSEE DIRECTED THE ASSESSING OFFICER TO WORK OUT THE TAXABLE FRINGE BENEFITS @ 5% OF SUCH EXPENSES INSTE AD OF 20% ADOPTED IN THE ASSESSMENT AND DETERMINE THE TAX ACCORDINGLY. THE SAME HAS BEEN OPPOSED BY THE REVENUE IN THE APPEAL BEFORE US. 4. AFTER HEARING THE LEARNED DR AND PERUSING THE MATERIAL ON RECORD, WE FIND THAT THE CIT(A) WAS JUS TIFIED IN DIRECTING THE ASSESSING OFFICER TO WORK OUT THE TAXABLE FRINGE BENEFITS @ 5% OF SUCH EXPENSES INSTEAD OF 20 % ADOPTED IN THE ASSESSMENT. WE FIND THAT THE ASSESS EES ITA NO. 1251/PN/2009 TAPI IRRIGATION DEVT. CORPN A.Y. 2006- 07 3 CASE IS NOT COVERED BY ANY EXEMPTION PROVIDED UNDER CHAPTER XII-H RELATING TO THE INCOME-TAX ON FRINGE BENEFITS. THOUGH, THE ASSESSEE IS A CORPORATION SE T UP BY THE GOVERNMENT OF MAHARASHTRA BUT COVERED BY THE DEFINITION OF EMPLOYER BEING A COMPANY AS PER PROVI SIONS OF SECTION 2(17) READ WITH SECTION 2(26)(IA) OF THE ACT. THEREFORE, THE ASSESSEE IS LIABLE UNDER FRINGE BENE FIT TAX. SINCE THE ESTIMATE MADE BY THE ASSESSING OFFICER WA S ON HIGHER SIDE AND THAT THE ASSESSEE IS GOVERNMENT OWN ED COMPANY AND THE ENTIRE STAFF ON DEPUTATION BASIS ENJOINING VARIOUS ALLOWANCES, WHICH ARE REIMBURSED BY THE GOVERNMENT OF MAHARASHTRA, THE FRINGE BENEFITS HAVE RIGHTLY BEEN ESTIMATED AT 5% BY THE CIT(A) WHICH NE EDS NO INTERFERENCE FROM OUR SIDE. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 11 TH DAY OF MAY 2011. SD/- SD/- (G.S. PANNU) ACCOUNTANT MEMBER (SHAILENDRA KUMAR YADAV) JUDICIAL MEMBER PUNE: DATED: 11 TH MAY, 2011 ANKAM ITA NO. 1251/PN/2009 TAPI IRRIGATION DEVT. CORPN A.Y. 2006- 07 4 COPY OF THE ORDER IS FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. THE CIT(A) II NASIK 4. THE CIT, - II NASIK 5. THE D.R, B BENCH, PUNE TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT, PUNE BENCHES, PUNE