ACIT, New Delhi V. M/s Global Green Company Ltd., New Delhi

ITA 1280/DEL/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 4025 (ITAT-DELHI)
• Duration Of Justice: 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-05-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 11-05-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 11-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MONA MOHANTY

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C, NEW DELHI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER & SHRI K.D. RANJAN, ACCOUNTANT MEMBER ITA NO. 1280/DEL/2011 ASSESSMENT YEAR: 2006-07 ACIT, VS. M/S GLOBAL GREEN COMPANY LTD., CIRCLE 12(1), THAPAR HOUSE, 124, JANPATH, NEW DELHI. NEW DELHI. AAACR 0635H (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. MONA MOHANTY, SR. DR RESPONDENT BY : NONE ORDER PER I.P. BANSAL, J.M. THIS IS DEPARTMENTAL APPEAL AND IT IS DIRECTED AG AINST ORDER PASSED BY LD. CIT(A) DATED 24.12.2010 FOR A.Y. 2006 -07. GROUNDS OF APPEAL READ AS UNDER: - 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 12 ,21,867/- OUT OF STAFF WELFARE EXPENSES MADE BY AO. 2. THE APPELLANT CRAVES LEAVE, TO ADD, ALTER OR AME ND ANY GROUND OF APPEAL RAISED ABOVE AT THE TIME OF THE HEARING. 2. A SUM OF RS. 12,21,867/- WAS ADDED BY THE AO BEI NG 20% OF RS.61,09,333/- SHOWN TO HAVE BEEN INCURRED BY THE A SSESSEE ON STAFF WELFARE EXPENSES. THE ADDITION HAS BEEN MADE BY TH E AO ON THE GROUND THAT ASSESSEE HAS NOT DECLARED ANY AMOUNT UN DER THIS HEAD ITA NO. 1280/D/2011 2 ELIGIBLE FOR FRINGE BENEFIT AND AS AGAINST THAT AS PER PROFIT AND LOSS ACCOUNT THERE APPEARS STAFF WELFARE EXPENSES. 3. BEFORE CIT(A), IT WAS SUBMITTED THAT FOR THE REL EVANT ASSESSMENT YEAR THE ASSESSEE HAD FILED A RETURN OF INCOME ELEC TRONICALLY ON 23.4.2006 DECLARING FRINGE BENEFITS AT RS. 54,83,29 9/-. 4. AS PER SUBMISSIONS MADE BEFORE CIT(A) THE CASE O F THE ASSESSEE WAS THAT OUT OF TOTAL STAFF WELFARE EXPENSES OF RS. 61,09,333/- SHOWN IN SCHEDULE XVII OF THE AUDITED ACCOUNTS, AN AMOUNT OF RS. 43,84,022/- WAS RELATED TO STAFF WELFARE AND BALANCE OF RS. 17, 25,311/- WAS RELATED TO CONVENIENCE AND TOUR. ACCORDINGLY ASSESSEE COMP ANY HAD OFFERED THE SAME AS FRINGE BENEFITS IN ITS RETURN FOR FRING E BENEFIT. 5. IT WAS FURTHER SUBMITTED THAT STAFF WELFARE EXPE NSES OF RS. 13,20,829/- AS BOOKED IN THE OTHER HEAD WAS ALSO OF FERED TO FRINGE BENEFIT TAX. HOWEVER, IN THE ASSESSMENT ORDER, THE AO WRONGLY CONSIDERED RS. 57,04,851/- AS CONVEYANCE AND TOUR E TC. AND THUS, AO AGAIN HAD ADDED RS. 61,09,333/- AS STAFF WELFARE EX PENSES WHICH WERE DEBITED IN THE PROFIT AND LOSS ACCOUNT. THUS, IT W AS PLEADED THAT AO HAS WRONGLY ADDED 20% OF 61,09,333/- AS FRINGE BENEFIT AS THE SAME WAS ALREADY RETURNED BY THE ASSESSEE IN THE RETURN OF F RINGE BENEFIT. AFTER CONSIDERING THESE SUBMISSIONS LD. CIT(A) HAS DELETE D THE ADDITION WITH THE FOLLOWING OBSERVATION: - I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLAN T, THE FINDINGS OF THE AO AND THE FACTS ON RECORD. PE RUSAL OF ITA NO. 1280/D/2011 3 THE STATEMENT OF EXPENSES ELIGIBLE FOR FRINGE BENEF IT FILED BY THE APPELLANT SHOWS THAT THE APPELLANT HAD INCURRED STAFF WELFARE EXPENSES OF RS. 4384022/- AND EXPENSES ON TRANSPORTATION OF STAFF OF RS. 1725311/- RESULTING IN A TOTAL EXPENDITURE OF RS. 6109333/- UNDER THE HEAD STAFF W ELFARE WHICH HAD BEEN OFFERED FOR THE PURPOSES OF COMPUTAT ION OF FRINGE BENEFIT UNDER THE HEAD STAFF WELFARE AND TRA VELING AND CONVEYANCE. IN VIEW OF THE FACTS ON RECORD AND IN VIEW OF THE FACTS THAT THESE EXPENSES OF RS. 6109333/- HAD ALREADY BEEN OFFERED BY THE APPELLANT FOR THE PURPOSES OF F RINGE BENEFIT TAX, THE DISALLOWANCE MADE BY THE AO IS NOT JUSTIFIED. THIS GROUND OF APPEAL IS ALLOWED. 6. NOTICE OF HEARING WAS SENT TO ASSESSEE. HOWEVER , NONE WAS PRESENT ON THE FIXED DATE OF HEARING. THEREFORE, W E PROCEED TO DECIDE THE APPEAL FILED BY THE REVENUE EX-PARTE QUA THE AS SESSEE. 7. LD. DR RELIED UPON THE ORDER OF AO BUT SHE COULD NOT CONTROVERT THE FACTUAL ASPECT DETERMINED BY CIT(A) THAT THE ST AFF WELFARE EXPENSES, 20% WHEREOF WAS ADDED BY THE AO WERE ALREADY CONSID ERED BY THE ASSESSEE IN ITS RETURN RELATING TO FRINGE BENEFITS. ASSESSEE HAS CLARIFIED BEFORE CIT(A) THAT STAFF WELFARE EXPENSES, DEBITED TO PROFIT AND LOSS ACCOUNT CONSISTED OF TWO AMOUNTS I.E. 43,84,022/- B EING EXPENSES RELATING TO STAFF WELFARE AND ANOTHER AMOUNT OF RS. 17,25,311/- RELATING TO CONVEYANCE AND TOUR AND BOTH THESE ITEMS WERE CONSI DERED FOR THE PURPOSE OF CALCULATION OF FRINGE BENEFIT. IF THE A FOREMENTIONED AMOUNTS WERE ALREADY CONSIDERED FOR COMPUTATION OF FRINGE B ENEFIT THEN THE ADDITION MADE BY AO WILL BE AMOUNTING TO DOUBLE ADD ITION AND THUS, WE ITA NO. 1280/D/2011 4 FIND NO INFIRMITY IN THE ORDER OF CIT(A) VIDE WHICH THE IMPUGNED ADDITION HAS BEEN DELETED. WE DECLINE TO INTERFERE. 8. IN THE RESULT, DEPARTMENTAL APPEAL IS DISMISSED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 11.05.201 1 SD/- SD/- (K.D. RANJAN) (I.P. BANSAL) ACCOUNTANT MEMBER JUDI CIAL MEMBER DATED: 11.5.11 *KAVITA CHOPRA COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR