ACIT 2(3), MUMBAI V. TECH MAHINDRA LTD, MUMBAI

ITA 1720/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75821 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 19-03-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 12-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GIRIJA DAYAL
• Assessee Lawyers: BHAVIN RAI
• Keywords: Corroborative evidences

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI . . , !'#$ , % &' BEFORE SHRI H.L. KARWA, PRESIDENT AND SHRI N.K. BILLAIYA, AM ./I.T.A. NO. 1720/MUM/2012 ( ( ( ( ( / ASSESSMENT YEAR : 2006-07 THE ACIT-2(3), AAYAKAR BHAVAN, MUMBAI-400 020 M/S. TECH MAHINDRA LTD., GATEWAY BLDG., APOLLO BUNDER, MUMBAI-400 001 ') % ./ * + ./PAN/GIR NO. : AAACM 3484F ( ), /APPELLANT ) .. ( -.), / RESPONDENT ) ), / / APPELLANT BY : ` SHRI GIRIJA DAYAL -.), 0 / /RESPONDENT BY : SHRI BHAVIN RAI 0 12% / DATE OF HEARING :19.3.2014 34( 0 12% / DATE OF PRONOUNCEMENT:19.03.2014 &5 / O R D E R PER N.K. BILLAIYA, AM: THIS APPEAL BY THE REVENUE IS PREFERRED AGAINST TH E ORDER OF THE LD. CIT(A)-6, MUMBAI DT. 12.12.2011 PERTAINING TO ASSES SMENT YEAR 2006-07. 2. THE ASSESSMENT HAS BEEN MADE U/S. 115WE(3) OF TH E ACT. DURING THE COURSE OF THE FRINGE BENEFIT TAX (FBT), THE ASS ESSING OFFICER NOTICED THAT THE ASSESSEE HAS INCURRED (A) TRAVELLING EXPEN SES (B) STAFF WELFARE EXPENSES (C) MISCELLANEOUS EXPENSES. THE AO DISALL OWED RS. 26,29,74,931/- OUT OF THE TOTAL TRAVELLING EXPENSES AND ADDED BACK TO THE ITA NO.1720/MUM/2012 2 TOTAL VALUE OF FRINGE BENEFIT. THE REASONS GIVEN B Y THE AO ARE THAT THE ASSESSEE COULD NOT FILE THE DETAILS GIVING BIFURCAT ION THAT THE SAME WERE PAID OUTSIDE INDIA AND THEREFORE OUTSIDE THE PURVIE W OF FBT. 2.1. IN SO FAR AS STAFF WELFARE EXPENSES ARE CONCER NED, THE AO NOTICED THAT THE ASSESSEE HAS NOT CONSIDERED EXPENSES AMOUN TING TO RS. 17,19,31,782/- FOR THE PURPOSES OF COMPUTING FBT CL AIMING THAT SUCH EXPENSES ARE IN THE NATURE OF PERQUISITES TAXABLE I N THE HANDS OF EMPLOYEES. SINCE NO BIFURCATION WAS MADE AVAILABLE TO THE AO, THE AO ADDED 20% OF THE SAME TO THE TOTAL VALUE OF FRINGE BENEFIT. 3. AGGRIEVED, ASSESSEE CARRIED THE MATTER BEFORE TH E LD. CIT(A). THE ASSESSEE FILED A STATEMENT OF RECONCILIATION WITH P ROFIT AND LOSS ACCOUNT EXPLAINING THE DIFFERENCE IN THE AMOUNT CONSIDERED FOR FBT AND THE AMOUNT DEBITED TO THE PROFIT AND LOSS ACCOUNT. AFT ER CONSIDERING THE DETAILED BIFURCATIONS AND RECONCILIATION STATEMENT, THE LD. CIT(A) OBSERVED THAT THE ASSESSEE IS MAINTAINING SEPARATE ACCOUNT FOR ITS INDIAN AND FOREIGN OPERATIONS AND THE EXPENSES ARE SEPARA TELY AND CLEARLY REFLECTED IN THE BOOKS OF ACCOUNT FOR ITS INDIAN A ND FOREIGN OPERATIONS. ALL THE DETAILS WITH SUPPORTING EVIDENCES WERE TRAN SMITTED TO THE AO CALLING FOR REMAND REPORT. 3.1. AFTER CONSIDERING THE REPLY OF THE AO AND THE DETAILS AND THE BIFURCATIONS FILED BY THE ASSESSEE AND AFTER CONSID ERING THE FACT THAT ON IDENTICAL DETAILS, THE AO HAS ACCEPTED THE CONTENTI ON OF THE ASSESSEE FOR A.Y. 2007-08 AND 2008-09. THE LD. CIT(A) DELETED T HE ADDITIONS. FOR SIMILAR REASONS THE LD. CIT(A) ALSO DELETED THE ADD ITIONS MADE ON ACCOUNT OF STAFF WELFARE AND MISCELLANEOUS EXPENDIT URE. ITA NO.1720/MUM/2012 3 4. AGGRIEVED BY THIS, THE REVENUE IS BEFORE US. TH E LD. DEPARTMENTAL REPRESENTATIVE STRONGLY SUPPORTED THE FINDINGS OF THE AO. 5. THE LD. COUNSEL FOR THE ASSESSEE RELIED UPON THE DECISION OF THE LD. CIT(A). 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES. WE FIND THAT BEFORE THE LD. CIT(A), THE ASSESSEE HAD FILED ALL THE NECESSARY DETAILS RE CONCILING THE DIFFERENCE BETWEEN THE AMOUNT CONSIDERED FOR FBT AND THE AMOUN T DEBITED TO THE PROFIT AND LOSS ACCOUNT. WE ALSO FIND THAT THE LD. CIT(A) HAS CALLED FOR A REMAND REPORT. A PERUSAL OF THE ORDER OF THE LD. C IT(A) SHOWS THAT HE HAS GIVEN A CATEGORICAL FINDING THAT THE ASSESSEE IS MAINTAINING SEPARATE ACCOUNT FOR ITS INDIAN OPERATIONS AND OVERSEAS OPER ATIONS. CONSIDERING ALL THESE FACTS IN TOTALITY AND CLEAR FINDING ON FACTS BY THE LD. CIT(A), WE DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A). 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH MARCH, 2014. &5 0 4( % 6 7&8 19TH MARCH, 2014 4 0 9 SD/- SD/- (H.L. KARWA ) (N.K . BILLAIYA ) / PRESIDENT % &' / ACCOUNTANT MEMBER MUMBAI; 7& DATED 19 TH MARCH, 2014 . . ./ RJ , SR. PS ITA NO.1720/MUM/2012 4 &5 &5 &5 &5 0 00 0 -1! -1! -1! -1! :!(1 :!(1 :!(1 :!(1 / COPY OF THE ORDER FORWARDED TO : 1. ), / THE APPELLANT 2. -.), / THE RESPONDENT. 3. ; ( ) / THE CIT(A)- 4. ; / CIT 5. !<9 -1 , , / DR, ITAT, MUMBAI 6. 9= > / GUARD FILE. &5 &5 &5 &5 / BY ORDER, .!1 -1 //TRUE COPY// ? ?? ? / @ @ @ @ * * * * (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI