Peerless Hotels Ltd., Kolkata V. DCIT,Cir-8,Kolkata, Kolkata

ITA 1285/KOL/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3238 (ITAT-KOLKATA)
• Duration Of Justice: 10 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-07-2013
• Appeal Filed By: Assessee
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 07-09-2012
• Court: TRIBUNAL
• Department Lawyers: D MUKHOPADHYAY
• Assessee Lawyers: T K S BISWAS

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH C , KOLKATA [ () , ,, , , !!' #$ !!' #$ !!' #$ !!' #$ ] ]] ] [BEFORE HONBLE SRI PRAMOD KUMAR, AM & HONBLE SR I GEORGE MATHAN, JM] & & & & /ITA NO.1285/KOL/2012 '$( )*/ ASSESSMENT YEAR : 2009-10 (#, / APPELLANT ) - $ - ( .#, /RESPONDENT) PEERLESS HOTELS LIMITED D.C.I.T., CIRCLE-8, KOLKATA -VERSUS- KOLKATA (PAN: AABCP 9484 D ) #, / 0 / FOR THE APPELLANT: SHRI T.K.S.BISWAS, FCA .#, / 0 / FOR THE RESPONDENT: SHRI D.MUKHOPADHYAY, SR.DR $1 / 2 /DATE OF HEARING : 12.07.2013 3) / 2 /DATE OF PRONOUNCEMENT : 19.07.2013. 4 / ORDER PER SHRI GEORGE MATHAN, JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A)-VIII, KOLKATA IN APPEAL NO.123/CIT(A)-VIII/KOL/2011-12 DA TED 31/07/2012 FOR A.YR.2009-10. 2. SHRI T.K.S.BISWAS, FCA REPRESENTED ON BEHALF OF THE ASSESSEE AND SHRI D.MUKHOPADHYAY, SR.DR REPRESENTED ON BEHALF OF THE REVENUE. 3. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS : 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANC ES OF THE CASE WAS IT APPROPRIATE FOR THE COMMISSIONER OF INCOME - TAX (APPEALS) TO HOLD THAT EXPENDITURE INCURRED OF RS. 1203658 FOR PROVISION OF FREE TRANSPORT TOWARDS AIR PORT PICKUP AND DROP FOR AIRLINE CREW MEMBERS IN CONSIDERATION OF REGULAR FLOW OF BUSINES S ATTRACTS FRINGE BENEFIT UNDER SECTION 115WB(2)(D) OF THE ACT. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE WAS IT APPROPRIATE FOR THE COMMISSIONER OF INCOME - TAX (APPEALS) TO CONFI RM THAT COST OF TRANSPORT CHARGES FOR VISITING GUESTS OF RS. 1477001 WHICH WAS CORRES PONDED BY RECOVERIES OF RDS.1528783 ATTRACTS FRINGE BENEFIT UNDER SECTION 1 15WB(2)(B) OF THE ACT. 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE WAS IT APPROPRIATE TO ITA NO.1285/KOL/2012 PEERLESS HOTELS LIMITED VS DC IT.CIR.8.KOL A.YR.2009-10 2 CONSIDER EXPENDITURE INCURRED OF RS. 435813 TOWARDS NIGHT DROPPING OF EMPLOYEES AS ATTRACTING FRINGE BENEFIT TAX WHICH GROUND RAISED A S ADDITIONAL GROUND WAS NOT CONSIDERED BY COMMISSIONER OF INCOME - TAX (APPEALS ). 4. FOR THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER AND OR PREFER ADDITIONAL GROUND AND TO SUBMIT RELEVANT PAPERS AT THE TIME OF HEARIN G OF APPEAL. 4. IN REGARD TO GROUND NOS.1 AND 2 IT WAS SUBMITTE D BY THE LD. AR THAT THE EXPENDITURE INCURRED ON ACCOUNT OF FREE TRANSPORT TOWARDS PICK UP AND DROP TO THE AIRPORT OF THE AIRLINE CREW MEMBERS WAS NOT LIABLE FOR FRINGE BENEFIT TAX AS THE AIRLINE CREWS WERE NOT EMPLOYEES OF THE ASSESSEE. IT WAS AL SO SUBMITTED THAT THE TRANSPORT CHARGES ON ACCOUNT OF VISITING GUESTS ALSO WAS NOT LIABLE TO FRINGE BENEFIT TAX AS THE GUESTS ARE NOT EMPLOYEES OF THE ASSESSEE. IT WAS TH E SUBMISSION THAT FRINGE BENEFIT TAX WAS LIABLE WHEN THERE IS RELATIONSHIP BETWEEN THE A SSESSEE AND THE PERSON FOR WHOM THE EXPENDITURE WAS INCURRED AND THE RELATIONSHIP W AS ONE OF THE EMPLOYER AND EMPLOYEE. HE PLACED RELIANCE ON THE CBDT CIRCULAR N O.8 OF 2005 DATED 29.08.20005, MORE SPECIFICALLY IN RESPECT OF QUESTION NO.7 THERE IN REPORTED IN 277 ITR STATUTE 20. IT WAS THE SUBMISSION THAT AS THERE WAS NO EMPLOYER AN D EMPLOYEE RELATIONSHIP IN RESPECT OF AIRLINE CREWS AND THE GUESTS, LIABILITY OF FRINGE BENEFIT TAX WAS NOT APPLICABLE. IN REGARD TO GROUND NO.3 IT WAS SUBMITT ED THAT THE EMPLOYEES SHIFT ENDS AT 1.30 AM AND THE EXPENDITURE INCURRED TOWARDS THE NI GHT DROPPING OF THE EMPLOYEES WAS NOT LIABLE FOR FRINGE BENEFIT TAX, IN SO FAR AS IT WAS INCURRED ON ACCOUNT OF TRANSPORTATION OF THE EMPLOYEES TO THE PLACE OF WOR K FROM THE RESIDENCE AND FROM THE PLACE OF WORK TO THEIR RESIDENCE WAS NOT TREATED AS FRINGE BENEFIT AS PER THE CIRCULAR ISSUED BY THE CBDT. 5. IN REPLY THE LD. DR VEHEMENTLY SUPPORTED THE ORD ERS OF THE LD. CIT(A) AND THE AO. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AT THE OUTSET ON A PERUSAL OF THE CIRCULAR ISSUED BY CBDT IN CIRCULAR NO.8 OF 2005 DA TED 29.08.2005 CLEARLY SPECIFIES THAT THERE MUST BE EMPLOYER-EMPLOYEES RELATIONSHIP FOR THE PURPOSE OF TREATING THE EXPENSES AS FRINGE BENEFIT. IN THE CASE OF THE ASSE SSEE IN RESPECT OF GROUND NOS. 1 AND 2 IT IS NOTICED THAT THE AIR LINE CREW MEMBERS FOR WH OM THE AIRPORT PICK UP AND DROP HAS ITA NO.1285/KOL/2012 PEERLESS HOTELS LIMITED VS DC IT.CIR.8.KOL A.YR.2009-10 3 BEEN INCURRED ARE NOT EMPLOYEES OF THE ASSESSEE, CO NSEQUENTLY THE SAID EXPENDITURE CANNOT BE TREATED AS LIABLE FOR FRINGE BENEFIT TAX U/S 115WB(2)(D) OF THE ACT. SIMILARLY THE VISITING GUESTS CANNOT BE TREATED AS EMPLOYEES OF THE ASSESSEE AND THE COMPLIMENTARY PICK UP AND DROPPING CHARGES INCURRED ON ACCOUNT OF VISITING GUESTS ALSO DO NOT FALL UNDER THE PURVIEW OF THE FRINGE BE NEFIT TAX U/S 115WB(2)(B) OF THE ACT. IN RESPECT OF THE NIGHT DROPPING OF THE EMPLOY EES THE SHIFT ENDS IN THE EARLY MORNING AT 1.30 AM, THE SAME BEING ON ACCOUNT OF PI CK UP AND DROP OF THE EMPLOYEES FROM THEIR RESIDENCE TO THE PLACE OF WORK AND RETUR NING THEM TO THEIR RESIDENCE IS NOT LIABLE TO BE TREATED AS FRINGE BENEFIT ALSO IN VIEW OF THE CIRCULAR ISSUED BY THE CBDT IN CIRCULAR NO.8 OF 2005 DATED 29.08.2005 REFERRED TO SUPRA. IN THE CIRCUMSTANCES AS THE ISSUES OF THIS APPEAL ARE SQUARELY COVERED BY T HE CIRCULAR OF THE CBDT IN CIRCULAR NO.8 OF 2005 DATED 29.08.2005 REFERRED TO SUPRA. T HE ADDITIONS AS CONFIRMED BY THE LD. CIT(A) STAND DELETED. 7. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLO WED. ORDER PRONOUNCED IN THE COURT ON 19.07.2013. SD/- SD/- [ , ,, , ] [ .!!' #$ , ] [PRAMOD KUMAR] [ GEORGE MATHAN ] ACCOUNTANT MEMBER JUDICIAL MEMBER ( (( (2 2 2 2) )) ) DATE: 19.07.2013. R.G.(.P.S.) 4 / ''6 76)8- COPY OF THE ORDER FORWARDED TO: 1. PEERLESS HOTELS LIMITED, 12, J.L.NEHRU ROAD, KOLKA TA-700013. 2 THE D.C.I.T., CIRCLE-8, KOLKATA. 3 . CIT KOLKATA 4. CIT(A)- VIII, KOLKATA. 5. DR, KOLKATA BENCHES, KOLKATA .6 '/ TRUE COPY, 4$/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES ITA NO.1285/KOL/2012 PEERLESS HOTELS LIMITED VS DC IT.CIR.8.KOL A.YR.2009-10 4