D.C.I.T Cir - 1,kolkata, Kolkata V. M/s North Brook Jute Company, Kolkata

ITA 1349/KOL/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 4900 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 11 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-05-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 17-05-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: SANJOY MUKHERJEE
• Keywords: Opportunity of being heard
• Section: 142(1); 6; 10; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH B, KOLKATA (BEFORE SHRI P. M. JAGTAP, A.M. & SHRI S.S.VISWANET HRA RAVI, J.M.) ITA NO. 1349/KOL/2013 : A SSTT. YEAR : 2006-2007 DCIT, CIRCLE-1 KOLKATA VS M/S. NORTH BROOK JUTE COMPANY LTD. (PAN AABCN 5589P) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SANJOY MUKHERJEE, JCIT, SR. DR RESPONDENT BY : NONE DATE OF HEARING : 08.02.2016 DATE OF PRONOUNCEMENT : 06-05-2016 ORDER PER SHRI S.S.VISWANETHRA RAVI, J.M . THIS APPEAL IS FILED BY THE REVENUE HAVING AGGRIEVE D BY THE ORDER DATED 22.02.2013 PASSED BY THE CIT(APPEALS)-XXIV, K OLKATA IN APPEAL NO.1165/CIT(A)-XXIV/C-1/12-13 FOR THE ASSESSMENT YE AR 2006-07 FRAMED UNDER SECTION 115WE(3)/115WG(C) OF THE I.T.A CT. 2. CHALLENGING THE ABOVE IMPUGNED ORDER, THE APPELL ANT REVENUE HAS RAISED THE FOLLOWING GROUNDS BEFORE THE TRIBUNAL. 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE THE LD. CIT(A) HAS ERRED AND IS NOT JUSTIFIED IN DE LETING THE ADDITION OF RS.1,13,42,857/- AS FRINGE BENEFITS U/S 115WB(1)(C) ON ACCOUNT OF CONTRIBUTION TO THE EMPLO YEES PROVIDENT FUND ORGANISATION TOWARDS EMPLOYEES PENSI ON SCHEME, 1995. 2. THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER/O R AMEND ANY OF THE GROUNDS OF APPEAL DURING THE COURSE OF H EARING. 3. BRIEF FACTS OF THE CASE ARE THAT THE FRINGE BENE FIT TAX FOR SHORT FBT ASSESSMENT WAS COMPLETED U/S. 115WE(3) OF THE ACT O N 28.10.2008 2 ITA NO.1349/KOL/2013 N ORTH BROOK JUTE COMPANY ASSESSMENT YEAR: 2006-07 DETERMINING THE VALUE OF TAXABLE FRINGE BENEFITS AT RS.4,92,016/-. THE SAID ORDER PASSED UNDER SECTION 115WE(3) WAS RECTIF IED UNDER SECTION 154 OF THE ACT ON 29.10.2009. THE TOTAL VALUE OF FR INGE BENEFITS WERE REVISED TO RS.5,16,476/-. SUBSEQUENTLY THE CASE WAS REOPENED AS PER PROVISION OF SECTION 115WG(C) OF THE ACT BY ISSUING NOTICE UNDER SECTION 115WH OF THE ACT ON 22.10.2010 ON THE GROUN D THAT AN AMOUNT OF RS.1,13,42,857/- RELATING TO PAYMENTS MADE FOR P ENSION FUND WHICH IS A SUPERANNUATION FUND IS NOT CONSIDERED AS THE V ALUE OF FRINGE BENEFITS IN THE ASSESSMENT UNDER SECTION 115WE(3) W HICH IS CHARGEABLE TO FRINGE BENEFIT TAX AND HAS ESCAPED ASSESSMENT. 4. IN RESPONSE TO THE NOTICE ISSUED UNDER SECTION 1 15WH THE ASSESSEE FILED A LETTER ON 09.11.2010 TO TREAT THE RETURN FI LED BY THE ASSESSEE UNDER SECTION 139(1) FOR THE ASSESSMENT YEAR 2006-0 7 ON 30.11.2006 AS RETURN FILED IN COMPLIANCE OF NOTICE UNDER SECTION 115WH OF THE ACT. THEREAFTER, A NOTICE UNDER SECTION 142(1) WAS ISSUE D TO THE ASSESSEE ON 16.12.2011. THE ASSESSEE SUBMITTED WRITTEN EXPLANAT ION IN RESPONSE TO THE SAID NOTICES. ON SCRUTINY, THE AO FOUND THAT TH E ASSESSEE HAD DEBITED AN AMOUNT OF RS.1,43,33,150/- TO THE P&L AC COUNT FOR THE YEAR ENDED 31.03.2006 TOWARDS CONTRIBUTION TO PROVIDENT FUND AND OTHER FUNDS WHICH INCLUDES A SUM OF RS.1,13,42,857/- RELA TED TO THE PAYMENTS MADE TO THE PENSION FUND WHICH IS A SUPERANNUATION FUND AND AS PER PROVISIONS OF SECTION 115WB(1)(C) OF THE ACT. 5. DURING THE COURSE OF RE-ASSESSMENT PROCEEDINGS T HE ASSESSEE SUBMITTED THAT THE AMOUNT WAS ACTUALLY PAID BY THE ASSESSEE TO THE EMPLOYEES PROVIDENT FUND ORGANISATION ESTABLISHED U NDER A SCHEME FRAMED UNDER THE EMPLOYEES PROVIDENT FUND ACT, 1952 . AS SUCH, THE SAME REPRESENTS CONTRIBUTIONS MADE BY THE ASSESSEE TO A RECOGNIZED 3 ITA NO.1349/KOL/2013 N ORTH BROOK JUTE COMPANY ASSESSMENT YEAR: 2006-07 PROVIDENT FUND, AS DEFINED UNDER SECTION 2(38) OF T HE INCOME-TAX ACT, WHICH DOES NOT ATTRACT LEVY OF FBT AS HAS BEEN CLAR IFIED BY THE QUESTION NO.38 OF THE CBDTS CIRCULAR NO.8/2005 DATED 29.08. 2005. THE AO WAS OF THE VIEW THAT THE EMPLOYERS CONTRIBUTION TO THE PENSION FUND WAS FRINGE BENEFIT AND RS.1,13,42,857/- WAS ADDED TO TH E TOTAL VALUE OF FRINGE BENEFITS. 6. IN FIRST APPEAL, THE ASSESSEE CONTENDED THAT THE EMPLOYERS CONTRIBUTION TO THE EMPLOYEES PROVIDENT FUND IS N OT THAT OF A CONTRIBUTION TO ANY APPROVED SUPERANNUATION FUND AS DEFINED UNDER SECTION 2(6) OF THE ACT. ACCEPTING THE SAME, LD. CI T(A) DELETED THE SAID ADDITION MADE BY THE AO OF RS.1,13,42,857/- ON ACCOUNT OF FRINGE BENEFITS UNDER SECTION 115WB(1)(C) IF THE ACT. 7. NOW THE QUESTION TO BE DECIDED AS FORMULATED BY THE ASSESSEE IS AS TO WHETHER THE EMPLOYERS CONTRIBUTION TO THE EMPLO YEES PROVIDENT FUND IS A CONTRIBUTION DEFINED UNDER SECTION 2(6) OF THE ACT WHICH ATTRACTS FRINGE BENEFIT TAX U/S 115WB(1)(C) OF THE ACT OR NO T? 8. THE ASSESSEES CONTENTION WAS THAT THE EMPLOYER S CONTRIBUTION TO THE EMPLOYEES PROVIDENT FUND IS A STATUTORY CONTRIBUTIO N TO THE EMPLOYEES PENSION SCHEME FRAMED BY THE GOVERNMENT OF INDIA UNDER THE PROVISIONS CONTAINED IN THE EMPLOYEES PROVIDENT FUND & MISCELLANEOUS PROVISION ACT 1952, BUT DOES NOT COME UNDER SECTION 2(6) OF THE ACT AND SUCH CONTRIBUTION S MADE TO EMPLOYEES PROVIDENT FUND ORGANIZATION UNDER THE EMPLOYEES PENSION SCHEM E, 1995 ARE NOT A FRINGE BENEFIT. 4 ITA NO.1349/KOL/2013 N ORTH BROOK JUTE COMPANY ASSESSMENT YEAR: 2006-07 9. IN THIS CONNECTION, WE MAY REFER TO THE SECTION 2(6) OF THE INCOME TAX ACT WHICH DEFINES APPROVED SUPERANNUATION FUND FOR BETTER UNDER STANDING 'APPROVED SUPERANNUATION FUND' MEANS A SUPERANNUATI ON FUND OR ANY PART OF A SUPERANNUATION FUND WHICH HAS BEEN AN D CONTINUES TO BE APPROVED BY THE CHIEF COMMISSIONER OR COMMISS IONER] IN ACCORDANCE WITH THE RULES CONTAINED IN PART B OF TH E FOURTH SCHEDULE.' 10. A CLOSE READING OF THE ABOVE PROVISION GOES TO SPEAK THAT ANY CONTRIBUTION TO APPROVED SUPERANNUATION FUND REQUIR ES APPROVAL OF THE CHIEF COMMISSIONER OR COMMISSIONER INVARIABLY IN PU RSUANCE OF THE RULES CONTEMPLATED IN PART B OF THE FOURTH SCHEDULE . LET US EXAMINE THE FOURTH SCHEDULE PROVIDED IN THE ACT. THE FOURTH SCHEDULE PART A RECOGNISED PROVIDENT FUNDS 36 [ SEE SECTIONS 2( 38 ) , 10( 12 ) , 10( 25 ) , 36(1)( IV ) , 87(1)( D ) , 111 , 192(4) ] APPLICATION OF PART. 1. THIS PART SHALL NOT APPLY TO ANY PROVIDENT FUND TO WHICH THE PROVIDENT FUNDS ACT, 1925 (19 OF 1925), APPLIES. DEFINITIONS. 2. IN THIS PART, UNLESS THE CONTEXT OTHERWISE REQUIRE S, ( A ) 'EMPLOYER' MEANS ANY PERSON WHO MAINTAINS A PROV IDENT FUND FOR THE BENEFIT OF HIS OR ITS EMPLOYEES, BEING ( I ) A HINDU UNDIVIDED FAMILY, COMPANY, FIRM OR OTHER ASSOCIATION OF PERSONS, OR ( II ) AN INDIVIDUAL ENGAGED IN A BUSINESS OR PROFESSIO N THE PROFITS AND GAINS WHEREOF ARE ASSESSABLE TO INCOME-TAX UNDER THE HEAD 'PROFITS AN D GAINS OF BUSINESS OR PROFESSION'; ( B ) 'EMPLOYEE' MEANS AN EMPLOYEE PARTICIPATING IN A PROVIDENT FUND, BUT DOES NOT INCLUDE A PERSONAL OR DOMESTIC SERVANT; ( C ) 'CONTRIBUTION' MEANS ANY SUM CREDITED BY OR ON B EHALF OF ANY EMPLOYEE OUT OF HIS SALARY, OR BY AN EMPLOYER OUT OF HIS OWN MONEYS, TO THE INDIVI DUAL ACCOUNT OF AN EMPLOYEE, BUT DOES NOT INCLUDE ANY SUM CREDITED AS INTEREST; ( D ) '-----; ( E ) '---; 5 ITA NO.1349/KOL/2013 N ORTH BROOK JUTE COMPANY ASSESSMENT YEAR: 2006-07 ( F ) '---; ( G ) 'REGULATIONS OF A FUND' MEANS THE SPECIAL BODY O F REGULATIONS GOVERNING THE CONSTITUTION AND ADMINISTRATION OF A PARTICULAR PROVIDENT FUND; AND ( H ) 'SALARY' INCLUDES DEARNESS ALLOWANCE, IF THE TER MS OF EMPLOYMENT SO PROVIDE, BUT EXCLUDES ALL OTHER ALLOWANCES AND PERQUISITES. ACCORDING AND WITHDRAWAL OF RECOGNITION. 3. (1) ---: PROVIDED THAT IN A CASE WHERE RECOGNITION HAS BEEN ACCORDED TO ANY PROVIDENT FUND ON OR BEFORE THE 31ST DAY OF MARCH, 2006 AND SUCH PROVIDENT FUND DOES NOT SATISFY THE CONDITIONS SET OUT IN CLAUSE ( EA ) OF RULE 4, THE RECOGNITION TO SUCH FUND SHALL BE WITHDRAWN, IF SUCH FUND DOES NOT SATISFY, ON OR BEFORE THE 31ST DAY OF MARCH, 38 [2014], THE CONDITIONS SET OUT IN THE SAID CLAUSE A ND ANY OTHER CONDITION WHICH THE BOARD MAY, BY RULES SPECIFY, IN THIS BEHALF : PROVIDED FURTHER THAT NOTHING CONTAINED IN THE FIRST PROVISO SHALL APPLY TO THE PROVIDENT FUND OF AN ESTABLISHMENT IN RESPECT OF WHICH A NOTIFICATION HA S BEEN ISSUED BY THE CENTRAL GOVERNMENT UNDER SUB-SECTION (2) OF SECTION 16 OF THE EMPLOYEES' PRO VIDENT FUNDS AND MISCELLANEOUS PROVISIONS ACT, 1952 (19 OF 1952). PART B APPROVED SUPERANNUATION FUNDS 44 [ SEE SECTIONS 2( 6 ) , 10( 13 ) , 10( 25 )( III ) , 36(1)( IV ) , 45 87(1)( E ) , 192(5) , 206 ] DEFINITIONS. 1. IN THIS PART, UNLESS THE CONTEXT OTHERWISE REQUIRE S, 'EMPLOYER', 'EMPLOYEE', 'CONTRIBUTION' AND 'SALARY' HAVE, IN RELATION TO SUPERANNUATION FUNDS, THE MEANINGS ASSIGNED TO THOSE EXPRESSIONS IN RULE 2 OF PART A IN RELATION TO PROVIDENT FUNDS. APPROVAL AND WITHDRAWAL OF APPROVAL. 2. (1) THE 46 [PRINCIPAL CHIEF COMMISSIONER OR] CHIEF COMMISSIONE R OR 46 [PRINCIPAL COMMISSIONER OR] COMMISSIONER MAY ACCORD APPROVAL TO ANY SUPERAN NUATION FUND OR ANY PART OF A SUPERANNUATION FUND WHICH, IN HIS OPINION, COMPLIES WITH THE REQUIREMENTS OF RULE 3, AND MAY AT ANY TIME WITHDRAW SUCH APPROVAL, IF, IN HIS OPINION , THE CIRCUMSTANCES OF THE FUND OR PART CEASE TO WARRANT THE CONTINUANCE OF THE APPROVAL. (2) THE 46 [PRINCIPAL CHIEF COMMISSIONER OR] CHIEF COMMISSIONE R OR 46 [PRINCIPAL COMMISSIONER OR] COMMISSIONER SHALL COMMUNICATE IN WRITING TO TH E TRUSTEES OF THE FUND THE GRANT OF APPROVAL WITH THE DATE ON WHICH THE APPROVAL IS TO TAKE EFFE CT, AND, WHERE THE APPROVAL IS GRANTED SUBJECT TO CONDITIONS, THOSE CONDITIONS. (3) THE 46 [PRINCIPAL CHIEF COMMISSIONER OR] CHIEF COMMISSIONE R OR 46 [PRINCIPAL COMMISSIONER OR] COMMISSIONER SHALL COMMUNICATE IN WRITING TO TH E TRUSTEES OF THE FUND ANY WITHDRAWAL OF APPROVAL WITH THE REASONS FOR SUCH WITHDRAWAL AND T HE DATE ON WHICH THE WITHDRAWAL IS TO TAKE EFFECT. (4) THE 46 [PRINCIPAL CHIEF COMMISSIONER OR] CHIEF COMMISSIONE R OR 46 [PRINCIPAL COMMISSIONER OR] COMMISSIONER SHALL NEITHER REFUSE NOR WITHDRAW APPROVAL TO ANY SUPERANNUATION FUND OR ANY PART OF A SUPERANNUATION FUND UNLESS HE HAS GIVEN T HE TRUSTEES OF THAT FUND A REASONABLE OPPORTUNITY OF BEING HEARD IN THE MATTER. 6 ITA NO.1349/KOL/2013 N ORTH BROOK JUTE COMPANY ASSESSMENT YEAR: 2006-07 CONDITIONS FOR APPROVAL. 3. IN ORDER THAT A SUPERANNUATION FUND MAY RECEIVE AN D RETAIN APPROVAL, IT SHALL SATISFY THE CONDITIONS SET OUT BELOW AND ANY OTHER CONDITIONS W HICH THE BOARD MAY, BY RULES, PRESCRIBE ( A ) THE FUND SHALL BE A FUND ESTABLISHED UNDER AN IR REVOCABLE TRUST IN CONNECTION WITH A TRADE OR UNDERTAKING CARRIED ON IN INDIA , AND NOT LESS THAN NINETY PER CENT OF THE EMPLOYEE S SHALL BE EMPLOYED IN INDIA; ( B ) THE FUND SHALL HAVE FOR ITS SOLE PURPOSE THE PRO VISION OF ANNUITIES FOR EMPLOYEES IN THE TRADE OR UNDERTAKING ON THEIR RETIREMENT AT OR AFTER A SP ECIFIED AGE OR ON THEIR BECOMING INCAPACITATED PRIOR TO SUCH RETIREMENT, OR FOR THE WIDOWS, CHILDREN OR DEPENDANTS OF PERSONS WHO ARE OR HAVE BEEN SUCH EMPLOYEES ON THE DEATH OF THOSE PERSONS ; ( C ) THE EMPLOYER IN THE TRADE OR UNDERTAKING SHALL B E A CONTRIBUTOR TO THE FUND ; AND ( D ) ALL ANNUITIES, PENSIONS AND OTHER BENEFITS GRANT ED FROM THE FUND SHALL BE PAYABLE ONLY IN INDIA. APPLICATION FOR APPROVAL. 4. (1) AN APPLICATION FOR APPROVAL OF A SUPERANNUATIO N FUND OR PART OF A SUPERANNUATION FUND SHALL BE MADE IN WRITING BY THE TRUSTEES OF THE FUND TO T HE ASSESSING OFFICER BY WHOM THE EMPLOYER IS ASSESSABLE, AND SHALL BE ACCOMPANIED BY A COPY OF T HE INSTRUMENT UNDER WHICH THE FUND IS ESTABLISHED AND BY TWO COPIES OF THE RULES AND, WHE RE THE FUND HAS BEEN IN EXISTENCE DURING ANY YEAR OR YEARS PRIOR TO THE FINANCIAL YEAR IN WHICH THE APPLICATION FOR APPROVAL IS MADE, ALSO TWO COPIES OF THE ACCOUNTS OF THE FUND RELATING TO SUCH PRIOR YEAR OR YEARS (NOT BEING MORE THAN THREE YEARS IMMEDIATELY PRECEDING THE YEAR IN WHICH THE S AID APPLICATION IS MADE) FOR WHICH SUCH ACCOUNTS HAVE BEEN MADE UP, BUT THE 47 [PRINCIPAL CHIEF COMMISSIONER OR] CHIEF COMMISSIONE R OR 47 [PRINCIPAL COMMISSIONER OR] COMMISSIONER MAY REQUIR E SUCH FURTHER INFORMATION TO BE SUPPLIED AS HE THINKS PROPER. (2) IF ANY ALTERATION IN THE RULES, CONSTITUTION, O BJECTS OR CONDITIONS OF THE FUND IS MADE AT ANY TIM E AFTER THE DATE OF THE APPLICATION FOR APPROVAL, THE TRUSTEES OF THE FUND SHALL FORTHWITH COMMUNICATE SUCH ALTERATION TO THE ASSESSING OFFICER MENTIONED IN SUB-RULE (1), AND IN DEFAULT OF SUCH COMMUNICATION ANY APPROVAL GIVEN SHALL, UNLESS THE 47 [PRINCIPAL CHIEF COMMISSIONER OR] CHIEF COMMISSIONER OR 47 [PRINCIPAL COMMISSIONER OR] COMMISSIONER OTHERWISE ORDERS, BE DEEMED TO HAVE BEEN WITHDRAWN FROM THE DATE ON WHICH THE ALTE RATION TOOK EFFECT. CONTRIBUTIONS BY EMPLOYER WHEN DEEMED TO BE INCOME OF EMPLOYER. 5. WHERE ANY CONTRIBUTIONS BY AN EMPLOYER (INCLUDING THE INTEREST THEREON, IF ANY) ARE REPAID TO THE EMPLOYER, THE AMOUNT SO REPAID SHALL BE DEEMED FOR THE PURPOSE OF INCOME-TAX TO BE THE INCOME OF THE EMPLOYER OF THE PREVIOUS YEAR IN WHICH IT IS SO REPAID. DEDUCTION OF TAX ON CONTRIBUTIONS PAID TO AN EMPLOY EE. 48 6. WHERE ANY CONTRIBUTIONS MADE BY AN EMPLOYER, INCLU DING INTEREST ON CONTRIBUTIONS, IF ANY, ARE PAID TO AN EMPLOYEE DURING HIS LIFETIME IN CIRCUMST ANCES OTHER THAN THOSE REFERRED TO IN CLAUSE ( 13 ) OF SECTION 10 , TAX ON THE AMOUNTS SO PAID SHALL BE DEDUCTED AT T HE AVERAGE RATE OF TAX AT WHICH THE EMPLOYEE WAS LIABLE TO TAX DURING THE PRECEDING THR EE YEARS OR DURING THE PERIOD, IF LESS THAN THREE YEARS, WHEN HE WAS A MEMBER OF THE FUND, AND SHALL BE PAID BY THE TRUSTEES TO THE CREDIT OF THE CENTRAL GOVERNMENT WITHIN THE PRESCRIBED TIME AND I N SUCH MANNER AS THE BOARD MAY DIRECT. DEDUCTION FROM PAY OF AND CONTRIBUTIONS ON BEHALF O F EMPLOYEE TO BE INCLUDED IN RETURN. 7. WHERE AN EMPLOYER DEDUCTS FROM THE EMOLUMENTS PAID TO AN EMPLOYEE OR PAYS ON HIS BEHALF ANY CONTRIBUTIONS OF THAT EMPLOYEE TO AN APPROVED SUPER ANNUATION FUND, HE SHALL INCLUDE ALL SUCH DEDUCTIONS OR PAYMENTS IN THE RETURN WHICH HE IS RE QUIRED TO FURNISH UNDER SECTION 206 . 7 ITA NO.1349/KOL/2013 N ORTH BROOK JUTE COMPANY ASSESSMENT YEAR: 2006-07 11. THE PART A OF THE FOURTH SCHEDULE WHICH DEALS W ITH RECOGNISED PROVIDENT FUNDS UNDER MANY SECTIONS INCL UDING THE SECTIONS 2(38) OF THE ACT ESTABLISHES THAT THIS PART-A SHA LL NOT APPLY TO ANY PROVIDENT FUND TO WHICH THE PROVIDENT FUNDS ACT, 1925. 12. THE PART B DESCRIBES ABOUT APPROVED SUPERANNUA TION FUNDS INVOLVING SECTIONS 2(6), 10(13), 10(25)(III), 36 (1)(IV), 87(1)(E), 192(5), 206 OF THE ACT. THIS PART B PARTICULARLY DEALS WITH A FUND EST ABLISHED UNDER AN IRREVOCABLE TRUST IN CONNECTION WITH A TRADE OR UNDERTAKING CAR RIED ON IN INDIA AND REQUIRES CONTINUOUS APPROVAL PRINCIPAL CHIEF COMMISSIONER OR CHIEF COMMISSIONER AS THE CASE MAY BE. 13. IN THE PRESENT CASE, THE AO ADDED THE SAID ADDI TION SECTION 115WB OF THE ACT BY INVOKING SECTION 2(6) OF THE ACT WHICH DEFINES A PPROVED SUPERANNUATION FUND TO BE APPROVED BY THE CHIEF COMMISSIONER OR COMMISSION ER IN ACCORDANCE WITH THE RULES CONTAINED IN PART B OF THE FOURTH SCHEDULE, A S DISCUSSED ABOVE PART B DEALS WITH IN CONNECTION WITH A TRADE OR UNDERTAKING CARR IED ON IN INDIA, WHERE AS THE ASSESSEE IS JUTE MANUFACTURING COMPANY TO WHICH TH E PROVISIONS OF THE EMPLOYEES' PROVIDENT FUNDS & MISCELLANEOUS PROVISIONS ACT, 195 2 IS APPLICABLE. IT IS AN ACT TO PROVIDE FOR THE INSTITUTION OF PROVIDENT FUNDS AND PENSION FUND AND DEPOSIT LINKED INSURANCE FUND FOR EMPLOYEES IN FACTORIES AND OTHER ESTABLISHMENTS IN INDIA. THE SAID ACT APPLICABLE TO EVERY ESTABLISHMENT WHICH IS A FA CTORY ENGAGED IN ANY INDUSTRY SPECIFIED IN SCHEDULE-I CONTAINED THEREIN AND IN WH ICH TWENTY OR MORE PERSONS ARE EMPLOYED AND TO ANY OTHER ESTABLISHMENT EMPLOYING T WENTY OR MORE PERSONS OR CLASS OF SUCH ESTABLISHMENTS WHICH THE CENTRAL GOVERNMENT MAY, BY NOTIFICATION IN THE OFFICIAL GAZETTE SPECIFY ON THIS BEHALF. 8 ITA NO.1349/KOL/2013 N ORTH BROOK JUTE COMPANY ASSESSMENT YEAR: 2006-07 14. IN THIS REGARD, IN APPELLATE PROCEEDINGS LD AR HAS EXPLAINED, HOW ADDITION UNDER SECTION 115WB R/W SECTION 2(6) OF THE ACT IS NOT APPLICABLE VIDE HIS LETTER DATED 12.02.2013 IS PLACED AS UNDER.- 1). 'THAT THE COMPANY IS AN EMPLOYER TO WHICH THE PROVISIONS OF THE EMPLOYEES' PROVIDENT FUNDS & MISCELLANEOUS PROVISIONS ACT, 1952 APPLIES. 2). THAT UNDER THE PROVISIONS CONTAINED IN SECTION 6A OF THE SAID ACT, THE CENTRAL GOVERNMENT HAS FRAMED A SCHEM E NAMELY THE EMPLOYEES PENSION SCHEME, 1995 FOR THE PURPOSE OF PROVIDING PENSION TO THE EMPLOYEES OF AN ESTABLISHMENT TO WHICH THE ACT APPLIES. 3). THAT THE COMPANY, AS AN EMPLOYER, WAS REQUIRED TO CONTRIBUTE TO THE EMPLOYEES' PENSION FUND SET UP UN DER THE SAID STATUTORY EMPLOYEES' PENSION SCHEME @8.33% OF THE EMPLOYEES PAY AS PROVIDED UNDER CLAUSE 3 OF THE SCH EME. 4). THAT SUCH EMPLOYER'S CONTRIBUTION TOWARDS THE E MPLOYEES' PENSION FUND WAS PAID TO THE EMPLOYEES PROVIDENT FU ND ORGANIZATION IN ITS ACCOUNT NO. 10 PRESCRIBED FOR T HIS PURPOSE. 5). THAT THE BREAK OF THE COMPANY'S CONTRIBUTION TO THE EMPLOYEES PENSION FUND FOR THE FINANCIAL YEAR 2005- 06 IS AS FOLLOWS:- I) IN RESPECT OF HEAD OFFICE EMPLOYEES 1,40,08 1/- II] IN RESPECT OF HEAD OFFICE EMPLOYEES 1,12,02,77 6/- TOTAL 1,13,42,857/- THE RELEVANT EVIDENCES FOR VERIFICATION OF SUCH PAY MENT ARE BEING PRODUCED BEFORE YOUR HONOUR FOR NECESSARY VERIFICATION. 6). THAT WE ARE ENCLOSING HEREWITH A COPY OF THE EM PLOYEES' PENSION SCHEME, 1995 UNDER THE PROVISIONS OF WHICH THE ABOVE MENTIONED CONTRIBUTIONS WERE MADE BY THE COMP ANY AS AN EMPLOYER. WE HOPE, THIS PROVES BEYOND DOUBT THAT THE AMOUNT P AID BY THE COMPANY WAS A STATUTORY CONTRIBUTION PAID TO A SCHEME 9 ITA NO.1349/KOL/2013 N ORTH BROOK JUTE COMPANY ASSESSMENT YEAR: 2006-07 FRAMED BY THE CENTRAL GOVERNMENT UNDER THE PROVISIO NS OF THE EMPLOYEES' PROVIDENT FUND & MISCELLANEOUS PROVI SIONS ACT, 1952 AND NOT A CONTRIBUTION TO ANY 'APPROVED SUPERANNUATION FUND' DEFINED U/ S. 2(6) OF THE INCO ME TAX ACT.' 15. FOR THAT MATTER THE CENTRAL GOVERNMENT ENACTED THE EMPLOYEES' PROVIDENT FUND & MISCELLANEOUS PROVISIONS ACT UNDER WHICH A S CHEME FRAMED FOR THE PURPOSE OF PROVIDING FOR THE BENEFIT TO THE EMPLOYEES OF AN Y ESTABLISHMENT OR CLASS OF ESTABLISHMENTS TO WHICH THIS ACT APPLIES IN ORDER T O PROVIDE BENEFIT TO THE EMPLOYEES OF ANY ESTABLISHMENT BY GIVING SUPERANNUATION PENSI ON, RETIRING PENSION OR PERMANENT TOTAL DISABLEMENT PENSION. IN THE PRESENT CASE THE ASSESSEES CONTENTION WAS THAT THE EMPLOYERS CONTRIBUTION TO THE EMPLOYE ES PROVIDENT FUND IS A STATUTORY CONTRIBUTION TO THE EMPLOYEES PENSION SCHEME FRAME D BY THE GOVERNMENT OF INDIA UNDER THE PROVISIONS CONTAINED IN THE EMPLOYEES PRO VIDENT FUND & MISCELLANEOUS PROVISION ACT 195, PERUSAL OF THE RECORD SHOW THAT THE EMPLOYEES OF ASSESSEE HAVE OPTED FOR BECOMING THE MEMBERS OF THE SAID SCHEME T O AVAIL THE BENEFIT OF SUPERANNUATION PENSION, RETIRING PENSION OR PERMANE NT TOTAL DISABLEMENT PENSION. IN THIS REGARD, THE CIT-A EXAMINED THE NOTIFICATION IS SUED BY THE GOVERNMENT OF INDIA VIDE ITS NOTIFICATION NO. G.S.R. 748-E, DT: 16-11-1 995 WHICH IS REPRODUCED HEREIN BELOW: THE EMPLOYEES' PENSION SCHEME, 1995 HAS BEEN FRAMED BY THE CENTRAL GOVERNMENT IN EXERCISE OF THE POWERS CO NFERRED BY SECTION 6A OF THE EMPLOYEES' PROVIDENT FUNDS AND MISCELLANEOUS PROVISIONS ACT, 1952. THE RELEVANT PA RT OF THE SCHEME READS AS UNDER:- 'NOTIFICATION NO. G.S.R. 748(E, DATED NOVEMBER 16, 1995 - IN EXERCISE OF THE POWERS CONFERRED BY SECTI ON 6A OF THE EMPLOYEES PROVIDENT FUNDS AND MISCELLANEOUS PROVISIONS ACT, 1952 (19 OF 1952), TH E CENTRAL GOVERNMENT HEREBY MAKES THE FOLLOWING SCHEME, NAMELY:- 1. SHORT TITLE, COMMENCEMENT AND APPLICATION - 10 ITA NO.1349/KOL/2013 N ORTH BROOK JUTE COMPANY ASSESSMENT YEAR: 2006-07 (1) THIS SCHEME MAY BE CALLED THE EMPLOYEES' PENSIO N SCHEME, 1995. (2) (A) THIS SCHEME SHALL COME INTO FORCE ON 16 TH DAY OF NOVEMBER, 1 995. (B) SUBJECT TO THE PROVISIONS OF THIS SCHEME THE EM PLOYEES HAVE AN OPTION TO BECOME THE MEMBERS OF THE SCHEME WITH EFFECT FROM THE 1 ST APRIL, 1993. (3) SUBJECT TO THE PROVISIONS OF SECTION 16 OF THE EMPLOYEES' PROVIDENT FUNDS AND MISCELLANEOUS PROVISIONS ACT, 1 952, THIS SCHEME SHALL APPLY TO THE EMPLOYEES OF ALL FAC TORIES AND OTHER ESTABLISHMENTS TO WHICH THE EMPLOYEES' PROVID ENT FUNDS AND MISCELLANEOUS' PROVISIONS ACT, 1952 APPL IES OR IS APPLIED UNDER SUB-SECTION (3) OR SUB-SECTION (4) OF SECTION 1 OR SECTION 3 THEREOF. 16. IN THE PRESENT CASE, THE ASSESSEE HAS MADE THE CONTRIBUTIONS FOR ITS EMPLOYEES OF RS. 1,13,42,857/- TO THE EMPLOYEES PRO VIDENT FUND UNDER THE EMPLOYEES PENSION FUND SCHEME, 1995. IN THIS CO NNECTION A QUESTION AROSE FOR WHICH CBDT HAS GIVEN EXPLANATION WHICH IS REPRODUCED HEREIN BELOW: FINANCE ACT, 2005 - FBT FINANCE ACT, 2005 - EXPLANATORY NOTES ON THE PROVIS IONS RELATING TO FRINGE BENEFIT TAX CIRCULAR NO. 8/2005, DATED 29-8-2005 THE FINANCE ACT, 2005 HAS INTRODUCED A NEW LEVY, NA MELY, FRINGE BENEFIT TAX (HEREAFTER REFERRED TO AS FBT) ON THE VALUE OF CERT AIN FRINGE BENEFITS. THE PROVISIONS RELATING TO LEVY OF THIS TAX ARE CONTAIN ED IN CHAPTER XII-H (SECTIONS 115W TO 115WL) OF THE INCOME-TAX ACT, 1961. THIS CI RCULAR SEEKS TO PROVIDE A HARMONIOUS, PURPOSIVE AND CONTEXTUAL INTERPRETATION OF THE PROVISIONS OF THE FINANCE ACT, 2005 RELATING TO THE FBT SO AS TO FURT HER THE OBJECTIVE OF THIS LEVY. WOULD CONTRIBUTIONS TO APPROVED GRATUITY FUND OR PR OVIDENT FUND ATTRACT FBT? 38. SECTION 115WB READ WITH SECTION 115WC DOES NOT SPEC IFICALLY CONTAIN ANY PROVISION FOR CHARGEABILITY OF CONTRIBUTION TO APPR OVED GRATUITY FUND OR 11 ITA NO.1349/KOL/2013 N ORTH BROOK JUTE COMPANY ASSESSMENT YEAR: 2006-07 PROVIDENT FUND TO FBT. ACCORDINGLY, THE CONTRIBUTIO N TO THE AFORESAID FUNDS WOULD NOT ATTRACT LEVY OF FBT. 17. THE CBDT VIDE ITS CIRCULAR NO. 8/2005, DT: 29-8 -2005 HAS CLARIFIED THAT THE CONTRIBUTION TO APPROVED GRATUITY FUND OR PROVI DENT FUND WAS NOT CHARGEABLE TO FBT. IN VIEW OF THE ABOVE DISCUSSIONS, WE HOLD THAT CONTRIBUTIONS MADE TO THE EMPLOYEES PROVIDENT FUND UNDER THE EMPLOYEES PENSIO N SCHEME,1995 WHICH IS A STATUTORY CONTRIBUTION AS FRAMED BY THE GOVERNMENT OF INDIA EXERCISING THE POWERS CONFERRED ON IT BY SECTION 6A OF THE PROVISIONS OF THE EMPLOYEES PROVIDENT FUND & MISCELLANEOUS ACT, 1952 IS NOT A SUPERANNUATION FUN D AS DEFINED U/S. 2(6) OF THE ACT THEREFORE ADDITION OF RS. 1,13,42,857/- MADE BY THE AO TOWARDS FRINGE BENEFITS U/S.115WB(1)(C) OF THE ACT IS NOT SUSTAINABLE. ACCO RDINGLY, WE CONFIRM THE ORDER OF CIT-A AND THE GROUND RAISED BY REVENUE IS DISMISSED . 18. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH MAY,2016. SD/- SD/ - ( P.M.JAGTAP) (S.S.VISWANETHRA RAVI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 06/ 5 /2016 TALUKDAR/SR.PS COPY OF ORDER FORWARDED TO: 1 M/S. NORTH BROOK JUTE COMPANY LTD., 6, BRABOURNE RO AD, 2 ND FLOOR, ROOM NO.204, KOLKATA 700 001 2 DCIT, CIRCLE-1, KOLKATA 3 THE CIT(A), 4 5 CIT, 5. D.R. TRUE COPY, BY ORDER, ASSTT. REGISTRAR , ITAT, KOLKATA 12 ITA NO.1349/KOL/2013 N ORTH BROOK JUTE COMPANY ASSESSMENT YEAR: 2006-07