Artistic Stone Pvt.Ltd., V. The Dy.CIT., Navsari Circle, Navsari

ITA 1359/AHD/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 76651 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 10 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-04-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 31-03-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 09-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P L KUREEL SRDR

Judgement Text

, , , , B, IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, B BENCH . .. . . .. . , !' !' !' !', , , , #$ %&'( #$ %&'( #$ %&'( #$ %&'(, , , , )* + ) ' )* + ) ' )* + ) ' )* + ) ' BEFORE S/SHRI G.C. GUPTA, VICE-PRESIDENT AND ANIL CHATURVEDI, ACCOUNTANT MEMBER) ITA NO.1359/AHD/2011 [ASSTT.YEAR : 2006-2007] ARTISTIC STONE PRIVATE LTD. C/O. MANOJ C. PATEL AT: BORICH, POST: ASHTAGAM TAL. & DIST. NAVSARI. PAN : AACCA 3987 H /VS. DCIT, NAVSARI CIRCLE NAVSARI. ( (( (-. -. -. -. / APPELLANT) ( (( (/0-. /0-. /0-. /0-. / RESPONDENT) 1& 2 3 )/ ASSESSEE BY : SHRI SAKAR SHARMA + 2 3 )/ REVENUE BY : P.L. KUREEL, SR.DR 5 2 &(*/ DATE OF HEARING : 31 ST MARCH, 2014 678 2 &(*/ DATE OF PRONOUNCEMENT : 04/04/2014 )9 / O R D E R PER G.C. GUPTA, VICE-PRESIDENT: THIS APPEAL BY THE ASSESSEE FOR THE ASSTT.YEAR 2006-207 IS DIRECTED AGAINST THE ORDER O F THE CIT(A). 2. THE ONLY GROUND OF THE APPEAL OF THE ASSESSEE IS AS UNDER: 1. THE LD.CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE ADDITION OF RS.31,06,881/- MADE BY AO ON ACCOUNT OF FRINGE BENEFIT EQUIVALENT TO 20% ON SALES COMMISSION PAID OF RS.1, 55,34,406/- ITA NO.1359/AHD/2011 -2- 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE SALE COMMISSION WAS NOT PAID TO ANY OF ITS EMPLOYEES BY THE ASSESSE E. MOREOVER, THE ISSUE OF ADDITION ON ACCOUNT OF FRINGE BENEFIT TAX OUT OF SA LE COMMISSION PAID BY THE ASSESSEE IS COVERED IN FAVOUR OF THE ASSESSEE WITH THE PARA-58 OF THE CIRCULAR NO.8/2005 DATED 29-8-2005 ISSUED BY THE BOARD. THE LEARNED DR COULD NOT CONTROVERT THE SUBMISSIONS OF THE LEARNED AR OF THE ASSESSEE. 4. WE HAVE CONSIDERED RIVAL SUBMISSIONS. WE FIND T HAT THE ADDITION WAS MADE BY THE AO ON ACCOUNT OF FRINGE BENEFIT EQUIVAL ENT TO 20% ON SALES COMMISSION PAID OF RS.1.55 CRORES. THE BASIC FACT S OF THE CASE ARE NOT IN DISPUTE. THE ISSUE OF APPLICABILITY OF FRINGE BENE FIT PROVISIONS TO THE SALES COMMISSION PAID BY THE ASSESSEE IS COVERED WITH THE CIRCULAR NO.8/2005 DATED 29-8-2005 (SUPRA), A COPY OF WHICH HAS BEEN PLACED BY THE ASSESSEE BEFORE US. WE FIND THAT PARA-58 OF THE SAID CIRCULAR CLEARLY C LARIFIES THAT THE EXPENDITURE ON BROKERAGE AND SELLING COMMISSION IS NOT EXPENDITURE FOR THE PURPOSES OF SALES PROMOTION INCLUDING PUBLICITY WITHIN THE MEANING O F CLAUSE (D) OF SUB-SECTION (2) OF SECTION 115WB, AND ACCORDINGLY, THE FRINGE B ENEFIT TAX IS NOT PAYABLE ON BROKERAGE AND SELLING COMMISSION PAID FOR SELLING G OODS. IN THESE FACTS OF THE CASE AND THAT THE CIRCULAR HAS CLARIFIED THAT THE F RINGE BENEFIT TAX WAS NOT APPLICABLE TO THE SELLING COMMISSION PAID BY THE AS SESSEE, AND THEREFORE, THE ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE AND THE GROUND OF THE APPEAL OF THE ASSESSEE IS ALLOWED. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- ( %&'( %&'( %&'( %&'( / ANIL CHATURVEDI) )* + )* + )* + )* + /ACCOUNTANT MEMBER ( .. /G.C. GUPTA ) !' !' !' !' /VICE-PRESIDENT