ACIT, New Delhi V. M/s. Vanasthali Textiles Industries Ltd., New Delhi

ITA 1954/DEL/2012

• Counselvise Citation: 195420114 RSA 2012
• Duration Of Justice: 1 year(s) 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-01-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 27-01-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 27-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAMEER SHARMA
• Keywords: Gift

Judgement Text

ITA NO. 1954/DEL/2012 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH H, NEW DELHI BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 1954/DEL/2012 A.Y. : 2007-08 ACIT, CIRCLE17(1), CR BUILDING, NEW DELHI VS. M/S VANSTHALI TEXTILES INDUSTRIES LTD., E-67, GREATER KAILASH, NEW DELHI (PAN: AAACV0639B) (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) ASSESSEE BY : NONE DEPARTMENT BY : SH. SAMEER SHARMA, SR. D.R. ORDER ORDER ORDER ORDER PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS-XIX), NEW D ELHI DATED 01.2.2012 PERTAINING TO ASSESSMENT YEAR 2007-08. 2. THE ISSUE RAISED IS THAT LD. CIT(A) ERRED IN DE LETING THE ADDITION OF RS. 23,47,280/- BEING VALUE OF FBT ON REWARDS GRANTED BY THE ASSESSEE COMPANY. 3. IN THIS CASE AO NOTED THAT FROM A PERUSAL OF THE DETAILS FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS SEEN THAT A AMOUNT OF RS. 23,47,280/- HAS BEEN SHOWN AS INAM PAYABLE. ASSESSEE RESPONDED AS UNDER:- INAM PAYABLE IS PROVISIONS FOR GOOD WORK REWARD FOR THE PREVIOUS YEAR WHICH IS PAID TO WORKERS FOR ITA NO. 1954/DEL/2012 2 GOOD WORK DONE BY THEM. THE GOOD WORK IS DETERMINED BY THE SUPERVISOR DEPENDING UPON THE PRODUCTIVITY, BEHAVIOR, PUNCTUALITY ETC. THE WORKER S THE AMOUNT PAYABLE AS ON 31.3.2007 HAS BEEN PAID ON 31.5.2007. 3.1 AO OPINED THAT THE SAID SUM PAID BY THE ASSESSE E WAS IN THE NATURE OF REWARD. HENCE, AO OPINED THAT THE PAYMEN T FALLS UNDER THE CATEGORY OF FRINGE BENEFITS WHICH IS SUBJECT T O PROVISION OF SECTION 115WB. 4. BEFORE THE LD. CIT(A) SUBMITTED THAT THE SAID A MOUNT OF INAM PAYABLE IS AN INCENTIVE FOR BETTER PERFORMANCE AND IT IS BEING PART AND PARCEL AND SALARY AND WAGES. IT WAS CONTENDED THAT THE SAID SUM IS NOT IN THE NATURE OF GIFT TO ATTRACT THE PRO VISIONS OF FBT. LD. CIT(A) ACCEPTED THE CONTENTIONS AND HELD THAT THE RE IS NO CASE OF TREATING THE SAID AMOUNT PAID OR PAYABLE UNDER THE HEAD INAM AS VALUE OF TAXABLE FRINGE BENEFITS. 5. AGAINST THE ABOVE ORDER THE REVENUE IS IN APPEA L BEFORE US. 6. WE HAVE HEARD THE LD. DR. NONE APPEARED ON BEHAL F OF THE ASSESSEE. HOWEVER, IN OUR CONSIDERED OPINION, THE MATTER CAN BE DISPOSED OFF BY HEARING THE LD. DR AND PERUSING THE RECORDS. UPON HEARING THE LD. DR WE ARE OF THE OPINION THAT THE R EWARD UNDER CONSIDERATION IN THIS CASE HAS BEEN PAID TO THE EMP LOYEES AS INCENTIVE. WE AGREE WITH THE CONTENTION THAT ITS PART OF EMPLOYEE EMOLUMENTS. UNDER THE CIRCUMSTANCES, WE AGREE WITH THE LD. CIT(A) THAT THIS AMOUNT INVOLVED CANNOT BE TREATED AS TAXA BLE FRINGE BENEFITS. ACCORDINGLY, WE AFFIRM THE ORDER OF THE LD. CIT(A). 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE STANDS DISMISSED. ITA NO. 1954/DEL/2012 3 ORDER PRONOUNCED IN THE OPEN COURT ON 27/1/2014, UP ON CONCLUSION OF HEARING. SD/- SD/- [ [[ [RAJPAL YADAV RAJPAL YADAV RAJPAL YADAV RAJPAL YADAV] ]] ] [SHAMIM Y [SHAMIM Y [SHAMIM Y [SHAMIM YAHYA] AHYA] AHYA] AHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 27/1/2014 SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES