Joshi Technologies International Inc., Ahmedabad V. The ADIT.,(Intnl.Taxn.), Ahmedabad

ITA 2065/AHD/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 6063 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 29-05-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 15-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SADASHIV OHOL SR DR
• Keywords: Business expenditure

Judgement Text

, , , , C, IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, C BENCH , , , , . .. . . .. .'#$% '#$% '#$% '#$% , , , , & & & & ' ' ' ' BEFORE S/SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AN D A.K GARODIA, ACCOUNTANT MEMBER) ITA NO.2065/AHD/2010 [ASSTT. YEAR : 2007-2008] JOSHI TECHNOLOGIES INTERNATIONAL INC., 402, HERITAGE, OFF ASHRAM ROAD OFF. ASHRAM ROAD USMANPURA, AHMEDABAD. PAN : AAACJ 9592 P ( /VS. ADIT (INTNL. TAXN) AHMEDABAD. ( (( (*+ *+ *+ *+ / APPELLANT) ( (( (,-*+ ,-*+ ,-*+ ,-*+ / RESPONDENT) ( . / 0 / ASSESSEE BY : SHRI SANJAY R. SHAH / 0 / REVENUE BY : SHRI SADASHIV OHOL, SR.DR (2 / 3&/ DATE OF HEARING : 29 TH MAY, 2013 4#5 / 3&/ DATE OF PRONOUNCEMENT : 31/5/2013 6 / O R D E R PER MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE, ARISING FROM AN ORDER OF THE CIT(A), GANDHINAGAR DATED 18.03.2010, AND THE SUBSTANTIVE G ROUNDS ARE GROUND NO.2 AND 3 REPRODUCED BELOW: 2. THE CIT(A) HAS ERRED IN CONFIRMING AND JUSTIFYI NG THE ACTION OF THE AO & HOLDING THAT APPELLANT HAS LIABL E TO PAYMENT ITA NO.2065/AHD/2010 -2- OF FRINGE BENEFIT TAX UNDER PROVISIONS OF CHAPTER X II-H OF THE ACT EVEN AFTER OBSERVING THAT IN FACT & LAW THE APP ELLANT DOES NOT HAVE ANY EMPLOYEE. 3. THE CIT(A) HAS ERRED IN CONFIRMING THAT THERE EX ISTS A MASTER SERVANT RELATIONSHIP BETWEEN THE APPELLANT A ND ITS CONSULTANTS IGNORING THE FACT THAT THE APPELLANT DO ES NOT PAY ANY BENEFITS OF AN EMPLOYEE TO THE CONSULTANTS. 2. FACTS OF THE CASE, AS EMERGED FROM THE ASSESSMEN T ORDER PASSED UNDER SECTION 115WE(3) OF THE I.T.ACT DATED 29.12.2 009 FOR A.Y.2007-2008, THE ORDER UNDER APPEAL, ARE IDENTICA L WITH THE FACTS OF THE ASSESSEES CASE FOR A.Y.2006-2007. RATHER, THE LEARNED CIT(A) VIDE PARA 5 HAS ACKNOWLEDGED THIS FACT THAT A SIMIL AR APPEAL OF THE ASSESSEE FOR A.Y.2006-2007 WAS DECIDED VIDE A ORDER DATED 31.12.2009, AND THE ISSUE WAS DECIDED AGAINST THE A SSESSEE. NOW BEFORE US, A COPY OF THE ORDER OF THE ITAT, AHMEDAB AD, BENCH C IS PLACED ON RECORD, WHEREIN FOR A.Y.2006-2007, WHILE DECIDING THE ASSESSEES APPEAL I.E. JOSHI TECHNOLOGIES INTERNATI ONAL INC., IN ITA NO.906/AHD/2010 ORDER DATED 1.5.2013, IT WAS CONCLU DED AS UNDER: 6.8. SO THE FBT IS ELIGIBLE ONLY IN A CASE WHERE E XPENDITURE IS INCURRED BY THE EMPLOYER OSTENSIBLY FOR THE PURPOSE OF BUSINESS BUT INCLUDES PARTIALLY A BENEFIT OF A PERSONAL NATURE P ASSED ON TO THE EMPLOYEE. BUT, A LEGITIMATE BUSINESS EXPENDITURE NO T WITHIN THE AMBITS OF EMPLOYER & EMPLOYEE RELATIONSHIP IS OUTSI DE THE SCOPE OF FBT. IN VIEW OF THESE OBSERVATIONS, WE HEREBY HOLD THAT THE FBT PROVISIONS HAVE WRONGLY BEEN INVOKED IN THE PRESEN T CASE. WE HEREBY REVERSE THE LEGAL FINDINGS OF THE AUTHORITIE S BELOW AND DIRECT THE AO TO GIVE RELIEF ACCORDINGLY. GROUNDS ARE ALLO WED. SINCE A VIEW HAS ALREADY BEEN TAKEN BY A RESPECTED CO-ORDINATE BENCH, THEREFORE, WE HAVE NO REASON TO DEVIATE FROM THE SA ID VIEW, BEING PRONOUNCED ON IDENTICAL FACTS, HENCE RESPECTFULLY F OLLOWING THE SAME ITA NO.2065/AHD/2010 -3- FOR THIS YEAR AS WELL, WE HEREBY REVERSE THE FINDIN GS OF THE AUTHORITIES BELOW, AND ALLOW THESE GROUNDS OF THE ASSESSEE. 3. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- ( . .. . . .. .'#$% '#$% '#$% '#$% /A.K. GARODIA) & & & & /ACCOUNTANT MEMBER ( /MUKUL KR. SHRAWAT) /JUDICIAL MEMBER C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD