M/s. Bosch Ltd., Bangalore V. DCIT, Bangalore

ITA 1407/BANG/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 51309 (ITAT-BANGALORE)
• Duration Of Justice: 9 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-10-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 03-10-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 09-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G V GOPALA RAO CITI
• Assessee Lawyers: P J PARDIWALA

Judgement Text

PAGE 1 OF 11 ITA NO.1407/BANG/2010 1 IN THE INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCH B BEFORE SHRI N BARATHVAJA SANKAR, VICE PRESIDENT AND SHRI GEORGE GEORGE K, J.M ITA NO.1407/BANG/2010 (ASSESSMENT YEAR 2007-08) M/S BOSCH LIMITED (FORMERLY MOTOR INDUSTRIES CO. LTD.), HOSUR ROAD, ADUGODI, BANGALORE-30. - APPELLANT PAN NO.AAACM9840P VS THE DEPUTY COMMISSIONER OF INCOME TAX (LTU), JSS TOWER, 100 FT RING ROAD, BANASHANKARI III STAGE, BANGALORE-85. - RESPONDENT DATE OF HEARING : 03/10/2011 DATE OF PRONOUNCEMENT : 07/10/2011 APPELLANT BY : SHRI P J PARDIWALA RESPONDENT BY : SHRI G V GOPALA RAO, CIT-I ORD ER PER GEORGE GEORGE K : THIS APPEAL INSTITUTED BY THE ASSESSEE IS DIRECTED A GAINST THE ORDER OF CIT(A)-LTU, BANGALORE DATED 21.10.2010 . THE RELEVANT ASST. YEAR IS 2007-08. THE ORDER OF THE CIT(A) EMAN ATES FROM THE ORDER OF DY. CIT PASSED U/S 115WE(3) OF THE ACT. 2. THE GROUNDS OF APPEAL RAISED IN THIS APPEAL REA DS AS FOLLOWS:- PAGE 2 OF 11 ITA NO.1407/BANG/2010 2 I) THAT THE LEARNED CIT(A)-LTU ERRED IN UPHOLDING THE ACTION OF THE AO IN INCLUDING THE PAYMENTS OF RS.1,46,36,685/- MADE TO APPROVED HOSPITALS ON BEHALF OF THE EMPLOYEES AND THE REIMBURSEMENTS GIVEN TO EMPLOYEES AGAINST THE PAYMENTS MADE BY THEM TO THE APPROVED HOSPITALS IN THE VALUE OF FRINGE BENEFITS. II) THAT THE LEARNED CIT(A) ERRED IN HOLDING THAT THE PAYMENTS MADE TO APPROVED HOSPITALS ON BEHALF OF THE EMPLOYEES AND THE REIMBURSEMENTS GIVEN TO EMPLOYEES AGAINST THE PAYMENTS MADE BY THEM TO THE APPROVED HOSPITALS FALL UNDER THE SCOPE OF CLAUSE (E) OF SUB-SECTION (2) OF SECTION 115WB. III) THAT THE LEARNED CIT(A) OUGHT TO HAVE ACCEPTED THE APPELLANTS PLEA THAT THE PAYMENTS MADE TOWARDS HOSPITAL EXPENSES ARE NOT LIABLE TO FRINGE BENEFIT TAX AS PER SECTION 115WB(3) BECAUSE SUCH PAYMENTS ARE TAXABLE PERQUISITES U/S 17(2)(VI) ON WHICH TAX WOULD HAVE BEEN PAYABLE BY THE EMPLOYEES BUT FOR FIRST PROVISO TO SECTION 17(2) (WHICH SPECIFICALLY EXCLUDES ABOVE PAYMENTS FROM THE DEFINITION OF PERQUISITES). 3. BRIEFLY STATED THE FACTS ARE AS FOLLOWS:- THE ASSESSEE IS A LIMITED COMPANY. IT IS ENGAGED IN THE BUSINESS OF MANUFACTURE OF FUEL INJECTION EQUIPMENT , AUTO ELECTRIC ITEMS, PORTABLE ELECTRIC POWER TOOLS, ETC. THE ASS ESSEE COMPANY FILED ITS RETURN OF FRINGE BENEFITS FOR THE CONCERNED ASS T. YEAR ON 26.10.2007 DECLARING RS.14,07,69,193/- AS THE TAXAB LE VALUE OF FRINGE BENEFITS. THE ASSESSMENT WAS TAKEN UP FOR SCRUTINY AND STATUTORY NOTICE U/S 115WE(2) WAS ISSUED TO ASSESSEE ON 8.9.2 008. PAGE 3 OF 11 ITA NO.1407/BANG/2010 3 3.1 THE STAFF WELFARE EXPENSES INCURRED BY THE ASSE SSEE INCLUDED A SUM OF RS.1,46,36,685/-, WHICH REPRESENT ED THE PAYMENTS MADE TO APPROVED HOSPITALS ON BEHALF OF THE EMPLOYEE AND ALSO THE AMOUNTS REIMBURSED TO THE EMPLOYEES AGAINST PAYMENT M ADE BY THEM DIRECTLY TO THE APPROVED HOSPITALS. THE ASSESSEE C OMPANY CONTENDED BEFORE THE AO THAT THESE ARE NOT FRINGE BENEFITS SI NCE THESE ARE PERQUISITES WITHIN THE MEANING OF SECTION 17(2) OF THE ACT. HOWEVER, AS PER CLAUSE (II) OF PROVISO TO SECTION 17(2), PER QUISITE DOES NOT INCLUDE ANY EXPENDITURE ACTUALLY INCURRED BY THE EMPLO YEE ON HIS MEDICAL TREATMENT OR TREATMENT OF ANY MEMBERS OF HI S FAMILY IN RESPECT OF PRESCRIBED DISEASE OR AILMENT IN ANY HOS PITAL APPROVED BY THE CHIEF COMMISSIONER HAVING REGARD TO THE PRESCRI BED GUIDELINES. IT WAS REITERATED THAT THESE ARE PERQUISITES WHICH ARE TAXABLE IN THE HANDS OF THE EMPLOYEE BUT FOR THE PROVISO TO SECTION 17(2) AND HENCE, THEY DO NOT FALL WITHIN THE PURVIEW OF PRIVILEGES, SERVICE FACILITIES OR AMENITIES AS SPECIFIED U/S 115WB(1) RWS 115WB(3), BECAUSE SECTION 115WB(3) STIPULATES THAT PRIVILEGES, SERVICE FACIL ITIES OR AMENITIES DOES NOT INCLUDE PERQUISITE IN RESPECT OF WHICH TAX IS PAYABLE BY THE EMPLOYEE. 3.2 THE AO DID NOT ACCEPT THE ASSESSEES CONTENTIO N AND BROUGHT TO FRINGE BENEFITS THE SAID SUM OF RS.1,46, 36,685/- AND COMPLETED THE ASSESSMENT VIDE ORDER DATED 30.11.200 9. THIS ADDITION TO FRINGE BENEFITS HAS RESULTED IN ADDITIONAL TAX A MOUNTING TO RS.9,85,342/-. ACCORDING TO THE AO, SINCE THE EMPL OYEE ULTIMATELY DID NOT PAY ANY TAX ON THESE PERQUISITES, THE SAME SH OULD BE PAGE 4 OF 11 ITA NO.1407/BANG/2010 4 SUBJECTED TO FRINGE BENEFITS TAX. THE AO ALSO RELI ED ON THE CBDT CIRCULAR NO.8 OF 2005 DATED 29.8.2009. 4. ON FURTHER APPEAL, THE VIEW TAKEN BY THE AO WAS AFFIRMED BY THE FIRST APPELLATE AUTHORITY. 5. THE ASSESSEE, BEING AGGRIEVED, IS IN APPEAL BEF ORE US. THE LD. A.R, DURING THE COURSE OF HEARING, REITERAT ED WHAT WAS PORTRAYED BEFORE THE FIRST APPELLATE AUTHORITY. IN F URTHERANCE, IT WAS CONTENDED THAT - THE STAFF WELFARE EXPENSES INCURRED INCLUDED RS.1 .46 CRORES WHICH REPRESENTED THE PAYMENTS MADE TO APPRO VED HOSPITALS ON BEHALF OF THE EMPLOYEES AND THE AMOUNT S REIMBURSED TO THE EMPLOYEES AGAINST THE PAYMENTS MA DE BY THEM TO THE APPROVED HOSPITALS; - THAT THOSE WERE PERQUISITE WITHIN THE MEANING OF S. 17(2), HOWEVER, AS PER CLAUSE (II) OF THE FIRST PROVISO TO S.17(2), PERQUISITE DOES NOT INCLUDE ANY EXPENDITURE ACTUALL Y INCURRED BY THE EMPLOYEE ON HIS MEDICAL TREATMENT OR TREATME NT OF ANY MEMBER OF HIS FAMILY IN RESPECT OF THE DISEASES OR AILMENTS OF ANY MEMBER OF HIS FAMILY IN RESPECT OF THE PRESCRIBED DISEASES OR AILMENTS IN ANY HOSPITAL APP ROVED BY THE CCIT HAVING REGARD TO THE PRESCRIBED GUIDELINES ; - THAT THOSE PERQUISITES WERE TAXABLE IN THE HANDS OF THE EMPLOYEES, BUT, FOR THE PROVISO TO S. 17(2) AND, TH US, THEY DO NOT FALL WITHIN THE PURVIEW OF PRIVILEGE, SERVI CE, FACILITY OR AMENITY AS SPECIFIED U/S 115 WB(1) RWS 115 WB(3 ) BECAUSE S. 115 WB (3) STIPULATES THAT PRIVILEGE, S ERVICE, FACILITY OR AMENITY DOES NOT INCLUDE PERQUISITES I N RESPECT OF WHICH TAX WAS PAYABLE BY THE EMPLOYEE; THAT BECA USE THE EMPLOYEE WAS LIABLE TO PAY TAX ON ABOVE PERQUIS ITE, BUT, FOR THE PROVISO TO S. 17(2), THE PAYMENTS TO A PPROVED PAGE 5 OF 11 ITA NO.1407/BANG/2010 5 HOSPITAL AND AMOUNTS REIMBURSED TO EMPLOYEES AGAINS T THE PAYMENTS MADE TO APPROVED HOSPITALS FALL WITHIN THE SCOPE OF S. 115WB(3) AND, HENCE, NOT LIABLE TO FB TAX; - THAT THE REVENUES PHILOSOPHY IT IS IRRELEVANT THAT THE BENEFIT WAS NOT A TAXABLE PERQUISITE BY VIRTUE OF T HE PROVISO, BUT, NOT UNDER THE MAIN SECTION AND SINCE THE EMPLOYEE ULTIMATELY DOES NOT PAY ANY TAX ON THESE PERQUISITES, THE SAME SHOULD BE SUBJECTED TO FB TAX DOESNT STAND TO LOGIC THAT WHERE EMPLOYEES WERE NO T TAXED ON SPECIFIED INCOMES UNDER THE PROVISIONS OF I.T. A CT, TAX WAS COLLECTED ON SUCH INCOMES THROUGH ANOTHER SET O F PROVISIONS; 5.1. IN CONCLUSION, IT WAS EMPHASIZED THAT THE LD. CIT (A) ERRED IN (I) HOLDING THAT THE PAYMENTS MADE TO APPROVED HOSPITAL S ON BEHALF OF THE EMPLOYEES AND THE REIMBURSEMENTS GIVE N TO EMPLOYEES AGAINST THE PAYMENTS MADE BY THEM TO THE APPROVED HOS PITALS FALL UNDER THE SCOPE OF CLAUSE (E) OF SUB-SECTION (2) OF S. 115WB; AND THAT (II) SHE OUGHT TO HAVE ACCEPTED THE APPELLANTS PLEA T HAT THE PAYMENTS MADE TOWARDS HOSPITAL EXPENSES WERE NOT LIABLE TO F B TAX AS PER S. 115WB(3) BECAUSE SUCH PAYMENTS WERE TAXABLE PERQUISI TES U/S 17(2) ON WHICH TAX WOULD HAVE BEEN PAYABLE BY THE EMPLOYEES, BUT FOR CLAUSE (II) OF PROVISO TO S.17(2) WHICH SPECIFICALLY EXCLUDES ABOVE PAYMENTS FROM THE DEFINITION OF PERQUISITES. HE ALSO REFERRED TO THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F UNION OF INDIA AND ANOTHER V AZADI BACHAO ANDOLAN AND ANOTHER 263 ITR 706 AT PAGE 739 FOR THE PROPOSITION THAT MERELY BECAUSE THE TAX HAS BEEN EXEMPTED DOES NOT MEAN THAT ASSESSEE IS NOT LIABLE TO TAX. PAGE 6 OF 11 ITA NO.1407/BANG/2010 6 6. ON THE OTHER HAND, THE LD. D R PRESENT WAS VERY EMPHATIC IN HIS URGES THAT THE ISSUE HAS BEEN THOUGHTFULLY DEALT WI TH BY THE AO WHICH WAS SUSTAINED BY THE LD. CIT (A) FOR WELL JUDGED REASONS RECORDED IN HER IMPUGNED ORDER WHICH IS UND ER DISPUTE. IT WAS, THEREFORE, PLEADED THAT THE STAND OF THE AUTHO RITIES BELOW REQUIRES NO INTERVENTION BY THIS BENCH AT THIS STAGE . 7. WE HAVE DULY CONSIDERED THE RIVAL SUBMISSIONS, P ERUSED THE RELEVANT RECORDS AND ALSO THE RELEVANT PROVISIO NS OF THE ACT ON WHICH BOTH THE PARTIES HAVE PLACED THEIR RESPECTIVE FAITH. 7.1. AT THE OUTSET, WE WOULD LIKE TO REITERATE THA T THE CORE ISSUE FOR CONSIDERATION IS AS TO WHETHER THE PAYMENTS MADE TO APPROVED HOSPITALS ON BEHALF OF THE EMPLOYEES AND T HE REIMBURSEMENTS GIVEN TO THE EMPLOYEES AGAINST THE P AYMENTS MADE BY THEM TO THE SAID HOSPITALS DOES FALLS WITHI N THE SPHERE OF CLAUSE (A) OF SUB-SECTION (1) OF S.115WB OF THE ACT? 7.2. WHEN THE ASSESSEE WAS QUERIED BY THE AO FOR IT S CLAIM, THE ASSESSEE CONTENDED THAT THE PAYMENTS TO APPROVED HOSPITALS ON BEHALF OF THE EMPLOYEES OR THE AMOUNTS REIMBURSED TO THOSE WHO HAVE DIRECTLY PAID TO SUCH HOSPITALS WERE PERQUISIT ES WITHIN THE MEANING OF S.17 (1) OF THE ACT AND SINCE IT WAS TRE ATED AS A PERQUISITE IN THE HANDS OF THE EMPLOYEES, THE SAME CANNOT BE TR EATED AS FB IN THE CASE OF THE ASSESSEE. CONTRARY TO THE ASSESSEES CONTENTIONS, THE AO TOOK A VIEW, BY EXTENSIVELY QUOTING THE PROVISIONS OF S.115WB(1)(A) AS WELL AS 115WB(3) OF THE ACT, THAT PAGE 7 OF 11 ITA NO.1407/BANG/2010 7 5.3. PAYMENT TO APPROVED HOSPITALS ON BEHALF OF THE EMPLOYEES IS A PRIVILEGE/SERVICE/FACILITY OR AMENITY PROVIDED BY THE EMPLOYER TO THE EMPLOYEES. THEREFORE, PROVISIONS OF S.115WE (1) ARE APPLICABLE TO SUCH PAYMENTS. THAT THE BENEFIT IS NOT A PERQUISITE BY VIRTUE OF THE PROVISO AND NO T THE MAIN SECTION IS TOTALLY IRRELEVANT. A PROVISO I S ALWAYS PART OF THE SECTION. THE PROVISIONS OF A SECTION WILL HAVE TO BE READ IN CONJUNCTION WITH TH E EXPLANATION, PROVISOS ETC., TO THAT SECTION. CONTENTS OF SUCH EXPLANATION OR PROVISO CANNOT BE READ IN ISOLATION. THEREFORE BY THE NORMAL YARDSTICK THE PAYMENT BY THE EMPLOYER TO APPROVED HOSPITALS IS A PERQUISITE. HOWEVER, DUE T O THE SPECIFIC PROVISION IN THE PROVISO TO THE SECTIO N, IT IS NOT SO. NET RESULT OF THIS IS THAT THE EMPLOYEES ARE NOT LIABLE TO PAY ANY TAX ON SUCH PAYMENTS. CONSEQUENTLY, SUCH PAYMENTS ATTRACT FRINGE BENEFIT TAX. 7.3. ON FURTHER APPEAL, THE LD. CIT (A) BY TAKING R EFUGE ON THE BOARDS INSTRUCTION NO.8 OF 2005 CITED SUPRA SU STAINED THE STAND OF THE AO. 7.4. AT THIS JUNCTURE, WE RECALL THE S.17(2) PROVI SO (II) WHICH READS AS (II) ANY SUM PAID BY THE EMPLOYER IN RESPECT OF A NY EXPENDITURE ACTUALLY INCURRED BY THE EMPLOYEE ON HI S MEDICAL TREATMENT OR TREATMENT OF ANY OF HIS FAMILY (A) IN ANY HOSPITAL MAINTAINED BY THE GOVERNMENT OR ANY LOCAL AUTHORITY OR ANY HOSPITAL APPROVED BY THE GOVERNMENT FOR THE PURPOSES OF MEDICAL TREATMENT OR ITS EMPLOYEE: PAGE 8 OF 11 ITA NO.1407/BANG/2010 8 (B) IN RESPECT OF PRESCRIBED DISEASES OR AILMENT, IN ANY HOSPITAL APPROVED BY THE CHIEF COMMISSIONER HAVING REGARD TO THE PRESCRIBED GUIDELINES: PROVIDED THAT IN A CASE FALLING IN SUB-CLAUSE (B), THE EMPLOYEE SHALL ATTACH WITH HIS RETURN OF INCOME A CERTIFICATE FROM THE HOSPITAL. SPECIFYING THE DISEASE OR AILMENT FOR WHICH MEDICAL TREATMENT WAS REQUIRED AND THE RECEIPT FOR THE AMOUNT PAID TO THE HOSPITAL THUS, THIS SUB-CLAUSE STATES THAT THE EXPENDITURE ACTUALLY INCURRED BY THE EMPLOYEE ON MEDICAL TREATMENT FOR HIMSELF OR H IS FAMILY IN RESPECT OF PRESCRIBED DISEASE OR AILMENT IN ANY HOS PITAL APPROVED BY THE CHIEF COMMISSIONER HAVING REGARD TO THE PRESCRI BED GUIDELINES IS NOT TAXABLE AS PERQUISITE. S.115WB (3) OF THE ACT READS FOR THE PURPOSE OF SUB-SECTION (1), THE PRIVILEGE, SERVICE, FACILITY OR AMENITY DOES NOT INCLUDE PERQUISITES IN RESPECT OF WHICH TAX IS PAID OR PAYABLE BY THE EMPLOYEE (OR ANY BENEFIT OR AMENITY IN THE NATURE OF FREE OR SUBSIDIZED TRANSPORT OR ANY SUCH ALLOWANCE PROVIDED BY THE EMPLOYER TO HIS EMPLOYEES FOR JOURNEYS BY THE EMPLOYEES FROM THEIR RESIDENCE TO THE PLACE OF WORK OR SUCH PLACE OF WORK TO THE PLACE OF RESIDENCE. 7.4.1. IN THIS CONNECTION, FURTHER, WE RECALL THE BUDGET SPEECH OF HONBLE FINANCE MINISTER AS REPORTED IN 273 ITR (ST.) 25 THAT I HAVE LOOKED INTO THE PRESENT SYSTEM OF TAXING PERQUISITES AND I HAVE FOUND THAT MANY PERQUISITES ARE DISGUISED AS FRINGE BENEFITS, AND ESCAPE TAX. NEITHER THE EMPLOYER NOR THE EMPLOYEE PAYS ANY TAX ON THESE BENEFITS WHICH PAGE 9 OF 11 ITA NO.1407/BANG/2010 9 ARE CERTAINLY OF CONSIDERABLE MATERIAL VALUE. AT PRESENT WHERE THE BENEFITS ARE FULLY ATTRIBUTABLE TO THE EMPLOYEE THEY ARE TAXED IN THE HANDS OF THE EMPLOYEE; THAT POSITION WILL CONTINUE. IN ADDITION, I NOW PROPOSE THAT WHERE THE BENEFITS ARE USUALLY ENJOYED COLLECTIVELY BY THE EMPLOYEES AND CANNOT BE ATTRIBUTED TO INDIVIDUAL EMPLOYEES, THEY SHALL BE TAXED IN THE HANDS OF THE EMPLOYER. IN THE MEMORANDUM EXPLAINING THE PROVISO TO THE FIN ANCE BILL, IT WAS STATED AS - THEREFORE, IT IS PROPOSED TO ADOPT A TWO PRONGED APPROACH FOR THE TAXATION OF FRINGE BENEFITS UNDER THE INCOME-TAX ACT. PERQUISITES WHICH CAN BE DIRECTLY ATTRIBUTED TO THE EMPLOYEES WILL CONTINUE TO BE TAXED IN THEIR HANDS IN ACCORDANCE WITH THE EXISTING PROVISIONS OF SECTION 17(2) OF THE INCOME-TAX ACT AND SUBJECT TO THE METHOD OF VALUATION OUTLINED IN RULE 3 OF THE INCOME-TAX RULES. IN CASES, WHERE ATTRIBUTION OF THE PERSONAL BENEFIT POSES PROBLEMS, OR FOR SOME REASONS, IT IS NOT FEASIBLE TO TAX THE BENEFITS IN THE HANDS OF THE EMPLOYEE, IT IS PROPOSED TO LEVY A SEPARATE TAX KNOWN AS THE FRINGE BENEFIT TAX ON THE EMPLOYER ON THE VALUE OF SUCH BENEFITS PROVIDED OR DEEMED TO HAVE BEEN PROVIDED TO THE EMPLOYEES. 7.4.2. KEEPING THE ASSERTION OF THE HONBLE FINANC E MINISTER ON THE FLOOR OF THE AUGUST BODY IN VIEW, IT IS UNAMBIGU OUSLY CLEAR THAT WHERE PERQUISITES/BENEFITS WHICH ARE FULLY ATTRIBUTA BLE TO THE EMPLOYEE AND ARE TAXED IN THEIR HANDS, WOULD BE CONT INUED TO BE TAXED UNDER THE EXISTING PROVISIONS OF S.17(2) OF T HE ACT. HOWEVER, IN A CASE WHERE THE BENEFITS ARE USUALLY ENJOYED COLL ECTIVELY BY THE PAGE 10 OF 11 ITA NO.1407/BANG/2010 10 EMPLOYEES AND CANNOT BE ATTRIBUTED TO AN INDIVIDUAL EMPLOYEE, THEY SHALL BE TAXED IN THE HANDS OF THE EMPLOYER. IN THE PRESENT CASE, THE ATTRIBUTION OF PERSONAL BENEFIT DIRECTLY TO AN EMPLO YEE DOES NOT POSE A PROBLEM OR IS A CASE WHERE IT IS NOT FEASIBLE TO TAX THE BENEFIT IN QUESTION IN THE HANDS OF THE EMPLOYEE. 7.4.3. IN SUB-SECTION (3) OF S.115WB OF THE ACT, I T IS MADE CRYSTAL CLEAR THAT S.115WB(1)(A) DOES NOT INCLUDE SU CH PERQUISITE IN RESPECT OF WHICH TAX IS PAID OR PAYABLE BY THE EMPLOYE ES. IN THE PRESENT CASE, THE MEDICAL REIMBURSEMENT IS TAXABLE BUT FOR THE EXEMPTION PROVIDED IN THE PROVISO (II) TO S.17(2) O F THE ACT. IT CANNOT BE SAID, MERELY BECAUSE OF GRANT OF EXEMPTION, THAT THE TAX IS NOT PAYABLE. THEREFORE, A SPECIFIC ITEM OF PERQUISITE W HICH IS NORMALLY TAXABLE IN THE HANDS OF INDIVIDUAL EMPLOYEE CANNOT BE SUBJECTED TO FBT, ONLY FOR THE REASON THAT THE SAME IS EXEMPT IN THE HANDS OF THE EMPLOYEES. AS STATED EARLIER, WHEN AN ITEM WHICH IS TO BE TREATED AS A PERQUISITE IS EXEMPT IN THE HANDS OF AN INDIVID UAL EMPLOYEE, THE SAME, IN OUR PERCEPTION, COULD NOT BE SUBJECTED TO FBT. 7.4.4. IN AN OVERALL CONSIDERATION OF THE FACTS AN D CIRCUMSTANCES OF THE ISSUE AS DELIBERATED UPON IN T HE FORE-GOING PARAGRAPHS AND ALSO IN CONFORMITY WITH THE BUDGET SPEECH OF HONBLE FINANCE MINISTER ON THE FLOOR OF THE PARLIAMENT CITED SUPRA, WE ARE OF THE UNANIMOUS VIE W THAT THE PAYMENTS MADE TO APPROVED HOSPITALS AND THE REIM BURSEMENTS OF PAGE 11 OF 11 ITA NO.1407/BANG/2010 11 SUCH PAYMENTS DO NOT ATTRACT FRINGE BENEFIT TAX. IT IS ORDERED ACCORDINGLY. 7.4.5 INCIDENTALLY, IN AN IDENTICAL ISSUE TO THAT O F THE PRESENT ONE, THE EARLIER BENCH IN THE CASE OF VIJAYA BANK V. JCIT IN ITA NO.1066/BANG/2010 DATED: 26.8.2011 HAD RULED, IN ES SENCE, THAT THE PAYMENTS MADE TO APPROVED HOSPITALS ON BEHALF OF THE EMPLOYEES AND THE REIMBURSEMENTS GIVEN TO EMPLOYEES AGAINST THE PA YMENTS MADE BY THEM TO THE APPROVED HOSPITALS DO NOT ATTRACT FBT . 8. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED . THE ORDER PRONOUNCED ON THE 7 TH DAY OF OCTOBER, 2011 AT BANGALORE. SD/- SD/- (N BARATHVAJA SANKAR) (GEORGE GEORGE K) VICE PRESIDENT JUDICIAL MEMBER COPY TO : 1. THE REVENUE 2. THE ASSESSEE 3. THE C IT CONCERNED. 4. THE CIT(A) CONCERNED. 5. DR 6. GF MSP/ BY ORDER ASST. REGISTRAR, ITAT, BANGALORE.