M/s. Harbans Singh Satpal Singh, Hoshiarpur V. The Income-tax Officer, Ferozepur

ITA 219/ASR/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 76977 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 16-07-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 09-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAAD KIDWAI
• Assessee Lawyers: ANUPAM GUPTA S; SSH SUBHASH KHANNA
• Keywords: Depreciation; Reason to believe; Revenue expenditure
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. A.D. JAIN, JUDICIAL MEMBER AND SH. B.P. JAIN, ACCOUNTANT MEMBER I.T.A. NO. 219(ASR)/2013 ASSESSMENT YEAR: 2006-07 PAN:AACFH2051A M/S HARBANS SINGH SAT PAL SINGH VS. INCOME TAX OFFICER, ANAJ MANDI, TALWANDI, WARD III(1), FEROZEPUR DIST. FEROZEPUR (APPELLANT) (RESPONDENT) APPELLANT BY: S/SH SUBHASH KHANNA & ANUPAM GUPTA, A DVOCATES RESPONDENT BY: SH. SAAD KIDWAI, DR DATE OF HEARING: 16.07.2014 DATE OF PRONOUNCEMENT: 31.07.2014 ORDER PER A.D. JAIN, J.M. 1. THIS IS ASSESSEES APPEAL FOR THE ASSESSMENT YEAR 2006-07 AGAINST THE ORDER DATED 19.02.2013 PASSED BY THE LE ARNED CIT(A), BATHINDA, CONFIRMING THE LEVY OF PENALTY OF RS. 1,4 8,100/- UNDER SECTION 271FB OF THE INCOME-TAX ACT, 1961 (FOR SHORT THE A CT). 2. THE FOLLOWING GROUNDS OF APPEAL HAVE BEEN TAKEN: I. ON FACTS AND IN CIRCUMSTANCES OF THE CASE, THE LEAR NED CIT(A), BHATINDA HAS ILLEGALLY UPHELD THE PENALTY ORDER RS. 148100/- PASSED BY THE LEARNED A.O. 3(1), FEROZEPUR FOR THE ALLEGED DEFAULT OF LATE FILING OF FBT RETURN BECAUSE THE LEARNED CI T(A) IN APPELLANTS OWN APPEAL NO. 224-IT/10-11 FOR THE ASS ESSMENT YEAR 2006-07 ORDER DATED 28.09.2011 HAD ALREADY DELETED THE FBT IMPOSED AND AS SUCH THE ORDER OF PENALTY CANNOT STA ND IN THE EYES OF LAW ON A DELETED/CANCELLED ORDER OF QUANTUM. 2 I.T.A. NO. 219(ASR)/2013 ASSESSMENT YEAR: 2006-07 II. THE APPELLANT ALSO TOOK FOLLOWING GROUNDS BEFORE TH E LEARNED CIT(A) FOR CANCELLATION OF PENALTY, WHICH HAS BEEN BRUSHED ASIDE LIGHTLY: A) THIS WAS THE 1 ST YEAR IN WHICH FBT WAS IMPOSED AND THE APPELLANT UNDER THE ADVICE OF THE HIS LAWYER DID NO T FILE RETURN. B) THAT THE HONBLE ITAT AMRITSAR IN CASE OF M/S M ALIKS CO., FEROZEPUR REPORTED AT (2010) TAXATION 47 HAS SET AS IDE THE IMPOSITION OF FBT, THUS, MAKING IT A REASONABLE CA USE FOR NOT FILING THE FBT RETURN. C) THE LEARNED CIT(A) IN CASE OF M/S BAKHTAWAR LAL ASHOK KUMAR, FEROZEPUR CANTT. IN APPEAL NO. 69 I.T. CIT( A)/BTI/2009- 10 FOR ASSESSMENT YEAR 2006-07 HAS CANCELLED THE PE NALTY ON SIMILAR FACTS OF THE CASE. 3. AS PER THE FACTS AVAILABLE ON RECORD, THE ASSESS ING OFFICER OBSERVED THAT THE ASSESSEE FIRM HAD NOT FIL ED ITS RETURN OF FRINGE BENEFITS FOR THE YEAR UNDER CONSIDERATION , WHEREAS IT HAD INCURRED EXPENSES ON ITEMS AS PROVIDED UNDER SE CTION 115WB(2) OF THE ACT. THE ASSESSING OFFICE RECORDED THE FOLLOWING REASONS TO ISSUE NOTICE UNDER SECTION 115 WH OF THE ACT: WHILE SCRUTINIZING THE CASE, IT HAS BEEN NOTICED T HAT THE ASSESSEE HAS MADE FOLLOWING EXPENSES, WHICH IS COVE RED UNDER SECTION 115WB: S. NO. HEAD OF EXPENSE AMOUNT OF EXPENSES VALUE OF FRINGE BENEFITS 1. CAR EXPENSE 75888/- 15176/- 2. CAR DEPRECIATION 30718/- 6144/- 3. CAR DRIVERS SALARY 36900/- 7280/- TOTAL RS. 28,700/- 3 I.T.A. NO. 219(ASR)/2013 ASSESSMENT YEAR: 2006-07 THE ASSESSEE HAS PAID AN AMOUNT OF RS. 174900/- AS SALARY. AS SUCH ASSESSEE CONCERN COMES WITHIN THE DEFINITION O F EMPLOYER AS PROVIDED IN SECTION 115W OF THE ACT. IN VIEW OF SEC TION 115WD, THE ASSESSEE WAS LIABLE TO FILE THE RETURN OF FRINGE BE NEFITS TAX, WHICH HAS NOT BEEN FILED. HENCE, I HAVE REASON TO BELIEVE THA T VALUE OF FRINGE BENEFITS TO THE TUNE OF RS. 28700/- HAS ESCAPED ASS ESSMENT. 4. IN RESPONSE TO THE NOTICE UNDER SECTION 115WH OF THE ACT, THE ASSESSEE FILED ITS RETURN OF FBT ON 22.11.2010, SHO WING THE VALUE OF FBT AT RS. NIL. 5. WHILE LEVYING THE PENALTY IN QUESTION VIDE ORDER DATED 28.06.2011, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE FIRM FILED THE RETURN OF FRINGE BENEFITS WITHIN THE PRESCRIBED TIME AND THAT SINCE THE ASSESSEE HAD INCURRED EXPENSES ON VARIOUS ITEMS, WH ICH FALLS WITHIN THE AMBIT OF FRINGE BENEFITS AND VALUE OF WHICH HAS BEE N WORKED OUT TO RS. 28,700/-, THE ASSESSEE WAS LIABLE TO FILE ITS RETUR N OF FRINGE BENEFIT TAX ON OR BEFORE 31.10.2006 WHICH WAS FILED ON 22.11.2010. 6. BY VIRTUE OF THE IMPUGNED ORDER DATED 19.02.2013 , THE LEARNED CIT(A) DISMISSED THE APPEAL FILED BY THE ASSESSEE, SUSTAINING THE PENALTY OF RS. 1,48,100/- IMPOSED ON THE ASSESSEE. AGGRIEVE D, THE ASSESSEES APPEAL IS BEFORE US. 7. CHALLENGING THE IMPUGNED ORDER, THE LEARNED COUN SEL FOR THE ASSESSEE HAS SUBMITTED, AT THE OUTSET, THAT THE LEA RNED CIT(A) HAS ERRED IN UPHOLDING THE LEVY OF PENALTY, INASMUCH AS, THE LEA RNED CIT(A) VIDE 4 I.T.A. NO. 219(ASR)/2013 ASSESSMENT YEAR: 2006-07 ORDER DATED 28.09.2011 PASSED IN THE ASSESSEES OWN APPEAL NO. 224- IT/10-11, FOR THE ASSESSMENT YEAR 2006-07, HAS ALRE ADY DELETED THE FRINGE BENEFITS ASSESSMENT OF THE ASSESSEE AND THAT THEREF ORE, THE PENALTY ORDER DOES NOT STAND. 8. LEARNED DR, ON THE OTHER HAND, HAS PLACED STRONG RELIANCE ON THE IMPUGNED ORDER. 9. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIALS ON RECORD. 10. WHILE CONFIRMING THE PENALTY IMPOSED ON THE ASSE SSEE, THE LEARNED CIT(A), BATHINDA, IN HIS ORDER DATED 19.02. 2013 HAS HELD AS FOLLOWS: BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT D URING THE COURSE OF ASSESSMENT PROCEEDINGS U/S 143(3) OF THE INCOME TAX ACT, 1961, IT TRANSPIRED THAT THE APPELLANT ASSESSEE HAD NOT FILE D ITS FBT RETURN FOR THE A.Y. 2006-07. AS PER THE PROVISIONS OF SECTION 115WD(1) OF THE ACT, EVERY EMPLOYER WHO DURING THE PREVIOUS YEAR HA S PAID OR MADE PROVISION FOR PAYMENT OF FRINGE BENEFITS TO HIS EM PLOYEES, IS REQUIRED TO FURNISH ITS RETURN OF FBT ON OR BEFORE THE DUE D ATE OF FILING OF ITS INCOME TAX RETURN. ACCORDINGLY, THE AO ISSUED NOTIC E U/S 115WH OF THE ACT REQUIRING IT TO FURNISH THE FBT RETURN BECA USE THE ASSESSEE HAD INCURRED EXPENSES ON ITEMS PROVIDED IN SECTION 115WB(2) OF THE ACT. THE APPELLANT ASSESSEE FILED ITS RETURN SHOWIN G VALUE OF FBT AT RS. NIL. HOWEVER, THE AO NOTICED THAT THE APPELLANT ASSESSEE HAD INCURRED EXPENSES ON CAR, SALARY TO CAR DRIVER AND DEPRECIATION ON CAR WHICH WERE SUBJECT TO FBT. THE FBT RETURN WAS DUE T O BE FILED ON OR BEFORE 31.10.2006 BUT THE SAME WAS FURNISHED ON 22. 11.2010. THE ASSESSMENT U/S 115WE(3) WAS COMPLETED ON 28.12.2010 AND SIMULTANEOUSLY PENALTY PROCEEDINGS U/S 271FB FOR LA TE FILING OF FBT RETURN WERE ALSO INITIATED. DURING PENALTY PROCEEDI NGS, THE A/R OF THE APPELLANT EXPLAINED THAT SINCE THE EXPENSES INCURRE D ON VARIOUS ITEMS 5 I.T.A. NO. 219(ASR)/2013 ASSESSMENT YEAR: 2006-07 DID NOT FALL WITHIN THE AMBIT OF FRINGE BENEFITS ; NO FBT RETURN WAS REQUIRED TO BE FURNISHED. FINDING NO FORCE IN THE C ONTENTIONS OF THE APPELLANT, THE A.O. IMPOSED A PENALTY OF RS.1,48,10 0/- U/S 271FB OF THE ACT VIDE HIS ORDER DATED 28.06.2011. DURING APPELLATE PROCEEDINGS, THE A/R OF THE APP ELLANT REITERATED THE ARGUMENTS ADVANCED BEFORE THE AO BES IDES RELYING ON THE ORDER DATED 28.09.2011 OF CIT(A), BATHINDA, AGA INST ORDER U/S 143(3) IN THE CASE OF THE APPELLANT ASSESSEE ITSELF AND IN RESPECT OF THE SAME ASSESSMENT YEAR AS ALSO THE ORDER OF HONBLE I TAT AMRITSAR IN THE CASE OF MAILKS COMPANY AND M/S BAKHTAWAR LAL A SHOK KUMAR, FEROZEPUR. IT HAS ALSO BEEN CONTENDED THAT THE FBT RETURN WAS NOT FILED ON THE ADVICE OF HIS LAWYER IN AS MUCH AS THE VARIOUS CONTENTIONS RAISED WERE NOT CONSIDERED BY THE A.O. THE APPELLATE ORDERS RELIED UPON BY THE A/R OF T HE APPELLANT DO NOT RENDER ANY HELD IN THE PRESENT APP EAL BECAUSE IN THE SAID CASES, THE QUESTION OF LATE FILING OF FBT RETU RN WAS NOT INVOLVED. AS MENTIONED ABOVE, THE DUE OF FILING OF FBT RETURN IN THIS CASE WAS 31.10.2006 WHILE THE SAME WAS FURNISHED ON 22.11.20 10 IN RESPONSE TO NOTICE U/S 115WH OF THE ACT. THUS ON THE DUE DAT E OF FILING OF THE FBT RETURN, THE APPELLANT ASSESSEE COULD NOT ANTICI PATE AS TO WHETHER ITS CASE WOULD BE SUBJECTED TO SCRUTINY OR NOT AND FURTHER WHETHER ANY DISALLOWANCES OUT OF CAR EXPENSE, CAR DEPRECIATION AND SALARY TO THE DRIVER WOULD BE MADE OR NOT BY THE A.O. FURTHER, TH E NAME AND ADDRESS OF THE ADVOCATE ON WHOSE ADVICE THE FBT RET URN WAS NOT FURNISHED HAS NOT BEEN PROVIDED EITHER DURING PENAL TY PROCEEDINGS OR BEFORE ME AT THE APPELLATE STAGE. THE SAID LAWYER H AS ALSO NOT FURNISHED HIS AFFIDAVIT DURING PENALTY PROCEEDINGS OR APPELLATE PROCEEDINGS BEFORE ME AS TO WHAT WERE THE CIRCUMSTA NCES, BASIS AND REASONS WHICH LED HIM TO ARRIVE AT THE CONCLUSION T HAT FBT RETURN WAS NOT REQUIRED TO BE FURNISHED IN THIS CASE. IN THE A BSENCE OF COMPLETE INFORMATION IN THIS REGARD, THE CONTENTION OF THE A /R THAT THE FAULT ON THE PART OF THE APPELLANT ASSESSEE HAD OCCURRED DUE TO WRONG ADVICE OF THE COUNSEL, CANNOT BE ACCEPTED. IN VIEW OF ALL THESE FACTS AND CIRCUMSTANCES OF THE CASE, THE PENALTY IMPOSED BY T HE A.O. FOR LATE FURNISHING OF FBT RETURN AT RS. 1,48,100/- IS SUST AINED AND THE APPEAL OF THE APPELLANT STANDS DISMISSED. 6 I.T.A. NO. 219(ASR)/2013 ASSESSMENT YEAR: 2006-07 11. VIDE ORDER DATED 28.11.2008 (COPY PLACED ON REC ORD) PASSED UNDER SECTION 143(3) OF THE ACT, THE ASSESSING OFFI CER DISALLOWED 1/6 TH OF EXPENSES, INTER ALIA, DEPRECIATION OF CAR AT RS. 30 ,718/-, CAR EXPENSE OF RS. 75,888/-. VIDE ORDER DATED 28.12.2010 (COPY PLA CED ON RECORD) PASSED UNDER SECTION 115WE(3) OF THE ACT, IT WAS HE LD THAT THE VALUE OF THE AMOUNT OF FRINGE BENEFITS OF THESE EXPENSES, AR RIVED AT RS. 21,320/- (RS. 6,144/- BEING THE VALUE OF FBT ON CAR DEPRECI ATION OF RS. 30,718/- @ 20% AND RS. 15,176/- BEING THE VALUE OF FBT ON CAR EXPENSES OF RS. 75,888/- @ 20%), MADE THE ASSESSEE LIABLE TO FILE RETURN OF FRINGE BENEFITS TAX, AS PER SECTION 115WD OF THE ACT, WHIC H HAD NOT BEEN DONE, DUE TO WHICH, THE ASSESSING OFFICER HAD RECORDED RE ASONS TO BELIEVE THAT THE VALUE OF FRINGE BENEFITS TO THE TUNE OF RS. 28, 700/- HAD ESCAPED ASSESSMENT; THAT IN RESPONSE THERETO, THE ASSESSEE HAD FILED RETURN OF FRINGE BENEFITS ON 22.11.2010, SHOWING THE VALUE OF FRINGE BENEFITS AT RS. NIL; THE ASSESSEE HAD ALSO FILED WRITTEN REPLY, SUB MITTING THAT IT HAD FILED FBT RETURN WITH A DECLARATION THAT NO EMPLOYEE HAD BEEN PAID ANYTHING IN CASH OR KIND OVER AND ABOVE TO SALARY DUE AND TH AT THE PROVISIONS OF FBT ARE APPLICABLE ONLY WHEN AN EMPLOYEE IS PAID SO ME BENEFIT AS PER SECTION 115W OF THE ACT. 12. THE ASSESSING OFFICER IN HIS ORDER DATED 28.12.2 010 OBSERVED AS FOLLOWS: 7 I.T.A. NO. 219(ASR)/2013 ASSESSMENT YEAR: 2006-07 THE OBJECTION RAISED BY THE ASSESEE IS NOT ACCEP TABLE AS SECTION 115WG SPECIFICALLY PROVIDES VIDE EXPLANATION (A) TH AT WHERE NO RETURN OF FRINGE BENEFITS HAS BEEN FURNISHED BY THE ASSESSEE, IT SHALL ALSO BE DEEMED TO BE A CASE WHERE FRINGE BENEFITS C HARGEABLE TO TAX HAS ESCAPED A ASSESSMENT. IN THIS CASE, THE ASSESSE E HAD NOT FURNISHED ANY RETURN OF FRINGE BENEFITS. THE LEARNED COUNSEL FOR THE ASSESSEE HAS RAISED THE PLEA ON THE BASIS OF CIRCULAR NO. 08 DATED 26.08.2005 OF THE CB DT THAT THERE WILL BE DOUBLE TAXATION IN THE CASE IF THE TAX FOR EXPEN SES HAS ALREADY BEEN MADE BY THE A.O. WHILE MAKING ASSESSMENT U/S 143(3) . THE PLEA OF THE LEARNED COUNSEL THAT THERE WILL BE DOUBLE TAXAT ION AS PER CIRCULAR NO. 8 DATED 26.08.2005 IS NOT CORRECT. THE A.O. WHI LE FRAMING ASSESSMENT UNDER SECTION 143(3) IN THE CASE OF THE ASSESSEE FOR THIS VERY ASSESSMENT YEAR HAD DISALLOWED ONLY A PART OF THE EXPENSES WHICH HE CONSIDERED TO BE FOR THE PERSONAL BENEFITS OF THE PARTNER OF THE ASSESSEE FIRM. ON THE OTHER THE FRINGE BENEFITS AS DEFINED IN THE SECTION 115WB(1) MEANS ANY CONSIDERATION FOR EMPLOY MENT PROVIDED BY AN EMPLOYER TO HIS EMPLOYEES. THUS, THERE IS DIF FERENCE IN THE DISALLOWANCE IN THE ASSESSMENT MADE BY THE AO U/S 1 43(3) AND THE EXPENSES WHICH ARE SUBJECT TO CHARGEABILITY OF THE FRINGE BENEFITS, THE FORMER RELATES TO THE PERSONAL BENEFITS OF THE PART NERS WHILE THE LATTER RELATE TO THE BENEFIT FOR THE EMPLOYEES. MOREOVER, NO DISALLOWANCE WAS MADE BY THE A.O. UNDER THE HEAD TRAVELLING EXP ENSES AND TELEPHONE EXPENSES. THE LEARNED COUNSEL, ALSO FURNISHED AN EXTRACT FROM THE CIRCULAR NO. 8 DATED 29.08.2005 WHICH READS AS UNDE R:- WHERE SUCH REVENUE EXPENDITURE INCURRED ARE NOT AL LOWED AS DEDUCTION, FOR ANY REASON, WHILE COMPUTING THE INCO ME FROM BUSINESS OR PROFESSION OF THE EMPLOYER, THE EXPENDITURE CANN OT BE SAID TO HAVE BEEN INCURRED FOR SAID PURPOSE AND THUS, SHOULD NOT AS TREATED AS FRINGE BENEFITS. WITHOUT PREJUDICE TO THE FINDING GIVEN SUPRA, T HIS PLEA OF THE LEARNED COUNSEL IS ALSO NOT TENABLE AS THE A.O. IN HIS ORDER U/S 143(3) DATED 15.04.2008 DISALLOWED ONLY A PART OF T HE EXPENSES WHEREAS WHERE SUCH REVENUE EXPENDITURE ARE NOT ALL OWED AS DEDUCTION MEANS THE TOTAL DISALLOWANCE OF THE REVE NUE EXPENDITURE CLAIMED BY THE ASSESSEE UNDER SOME HEAD. 8 I.T.A. NO. 219(ASR)/2013 ASSESSMENT YEAR: 2006-07 AFTER SCRUTINIZING THE MATTER, IT HAS BEEN CONC LUDED THAT THE ASSESSEE HAS DEBITED EXPENDITURE IN ITS P&L ACC OUNT UNDER THE HEADS WHICH ARE TO BE SUBJECTED TO THE FRINGE BENEF ITS TAX. WHETHER THE ASSESSEE INCURRED ANY EXPENDITURE FOR HIS EMPLO YEES CAN BE BEST WORKED OUT BY THE AO AFTER FINDING THAT IT HAS DEBI TED EXPENSES UNDER THESE HEADS. IT WILL BE A VERY HYPOTHETICAL AND SUB JECTIVE MATTER TO DECLARE HOW AND TO WHAT EXTENT THE EMPLOYEES GOT BE NEFITS FROM THE EXPENSES DEBITED BY THE ASSESSEE. FURTHER, THERE ARE DEEMING PROVISIONS ALSO ENSHR INED IN SECTION 115WB(2) OF THE ACT VIDE WHICH THE FRINGE B ENEFITS SHALL BE DEEMED TO HAVE BEEN PROVIDED BY THE EMPLOYER TO THE EMPLOYEES IN CASE THE EMPLOYER DEBITS EXPENSES UNDER CERTAIN HEA DS. KEEPING IN VIEW THE ABOVE DISCUSSION, IT IS BEIN G CONCLUDED THAT THERE IS NO DOUBLE TAXATION AND THER E DOES NOT APPEAR TO BE ANY PROHIBITION AGAINST THE CHARGEABILITY OF TH E FRINGE BENEFITS TAX FROM THE ASSESSEE IN VIEW OF THE FACTS OF THE C ASE. ACCORDINGLY THE PLEA OF THE ASSESSEE THAT NOTHING HAS BEEN PROVIDED APART FROM SALARY TO THE EMPLOYEES CANNOT BE ACCEPTED. THE ASSESSEE HAS INCURRED CAR EXPENSES AT RS. 75 ,888/-, AND CAR DEPRECIATION EXPENSES AT RS. 30,718/- TOTAL RS. 1,06,606/- DURING THE YEAR AND THESE EXPENDITURE FOR THE PURPO SE OF FRINGE BENEFITS ARE COVERED UNDER SECTION 115WB(2)(A) OF T HE ACT AND THE VALUE OF FRINGE OF THE SAME AS PER SECTION 115WC(1) (C) COMES OF RS. 21,320/- , SALARY PAID TO CAR DRIVER RS. 36,900/- I S NOT TAKEN FOR FBT AS THE SAME DOES NOT FALL THE PURVIEW OF FRINGE BENEFI TS. AS DISCUSSED ABOVE RS. 21,320/- IS TAKEN AS VALUE OF FRINGE BENE FIT AND THE SAME IS ADDED BACK TO THE RETURN VALUE OF FBT. 13. THE ABOVE ASSESSMENT OF FRINGE BENEFITS STANDS D ONE AWAY WITH BY THE LEARNED CIT(A), BY VIRTUE OF ORDER DATED 28. 09.2011(COPY PLACED ON RECORD) THEREIN, THE LEARNED CIT(A) HAS HELD AS FOLLOWS: 6. I HAVE CAREFULLY CONSIDERED THE APPELLANTS CO UNSELS ARGUMENTS VIS--VIS GROUNDS OF APPEAL ALONG WITH THE CBDTS C IRCULAR AND CASE LAW CITED THEREIN, AND ALSO GONE THROUGH THE AOS F INDINGS CONTAINED IN HIS FBT REASSESSMENT ORDER THE APPEAL IS HEREBY DISPOSED OFF GROUND OF APPEAL WISE AS UNDER: 9 I.T.A. NO. 219(ASR)/2013 ASSESSMENT YEAR: 2006-07 6.1 ALL THE SIX GROUNDS OF APPEAL PERTAIN TO THE O NLY ISSUE AGITATED IN APPEAL AGAINST THE LEVY OF FBT OF RS. 7,430/- O UT OF TWO HEADS OF EXPENSES VIZ. CAR EXPENSES & CAR DEPRECIATION DEBIT ED TO THE P&L ACCOUNT ON THE GROUND THAT THESE EXPENSES ARE INCUR RED WHOLLY AND EXCLUSIVELY FOR BUSINESS PURPOSES WITHOUT INVOLVING ANY EXPENSES TO BE ATTRIBUTABLE TO THE EMPLOYEES OF THE FIRM WHO AR E STATED TO HAVE BEEN PAID SALARY FOR THEIR SERVICES RENDERED TO THE APPELLANT FIRM. IN SUPPORT OF ITS CONTENTION, THE APPELLANT HAS PLACED RELIANCE ON THE FOLLOWING: (A) CBDTS CIRCULAR NO. 08 DATED 26.08.2005 WHERE SUCH REVENUE EXPENDITURE INCURRED ARE NOT AL LOWED AS DEDUCTION FOR ANY REASON, WHILE COMPUTING THE INCOM E FROM BUSINESS OR PROFESSION OF THE EMPLOYER, THE EXPENDITURE CANN OT BE SAID TO HAVE BEEN INCURRED FOR SAID PURPOSE AND THUS SHOULD NOT BE TREATED AS FRINGE BENEFITS. (B) ITAT, AMRITSARS DECISION IN THE CASE OF MALIK S COMPANY, FEROZEPUR FOR THE ASSESSMENT YEAR 2006-07. ON PERUSAL OF THE REGULAR SCRUTINY ASSTT. ORDER U/S 144(3) DT. 28.11.2008. IT IS OBSERVED THAT A DISALLOWANCE @ 1/ 6 OF THE TOTAL EXPENSES OF RS. 1,33,742/- INCLUDING EXPENSES OF RS . 5468/- ON TELEPHONE, RS. 30,718/- ON ACCOUNT OF CAR DEPRECIAT ION, RS. 20,873/- ON A/C OF SCOOTER EXPENSES, CAR EXPENSES OF RS. 75 ,888/- AND SCOOTER DEPRECIATION OF RS. 795/- ON ACCOUNT OF PERSONAL EL EMENT INVOLVED IN THESE EXPENSES. BY SHOWING UTMOST REGARDS TO THE DO NOT HELP THE APPELLANT AS IT IS NOT A CASE OF DOUBLE TAXATION AS DISALLOWANCE OUT OF ABOVE TWO HEADS OF EXPENSES HAS BEEN FOUND TO BE MA DE BY THE AO AT THE TIME OF FRAMING REGULAR SCRUTINY ASSTT. ORDER U /S 143(3) DT. 2811.2008, HENCE THE CBDT CIRCULAR NO. 08 DATED 26. 08.2005 AND ITAT, AMRITSAR ORDER IN THE CASE OF MALIKS COMPANY, FEROZEPURE FOR THE ASSTT. YEAR 2006-07 ARE SQUARELY APPLICABLE ON THE FACTS AND IN THE CIRCUMSTANCES OF THE PRESENT CASE, OTHERWISE, IT WO ULD TANTAMOUNT TO DOUBLE TAXATION. FURTHER, THE LEARNED A/RS PLEADIN GS THAT EXCEPT SALARY NO EMPLOYEE HAS BEEN PAID ANY PERQUISITES AN D BENEFITS UNDER THE HEADS CAR EXPENSES AND CAR DEPRECIATION. FURTHE R, IT IS NATURAL PHENOMENON THAT THE EMPLOYEES ARE NOT LET TO USE TH E FIRMS CAR, THEY ARE RESTRAINED TO USE UPTO SCOOTER/MOTOR CYCLE. FIN DING FORCE IN THESE CONTENTIONS OF THE APPELLANT AND IN THE LIGHT OF TH E FACT THAT THE LEARNED A.O. HAS NOT BRING OUT ANY CONCRETE AND POSITIVE MA TERIAL ON RECORD TO 10 I.T.A. NO. 219(ASR)/2013 ASSESSMENT YEAR: 2006-07 HOLD THAT BOTH CAR EXPENSES AND CAR DEPRECIATION IN VOLVED PERQUISITE PAID/BENEFITS ALLOWED TO THE EMPLOYEES OUT OF THESE HEADS OF EXPENSES. IN VIEW OF THESE PECULIAR FACTS AND CIRCUMSTANCES A ND TAKING AN OVERALL VIEW OF THE MATTER FROM ALL ANGLES INCLUDIN G SHOWING UTMOST REGARD TO THE ABOVE QUOTED BOARDS CIRCULAR AND IT AT, AMRITSARS DECISION (SUPRA), I AM OF THE CONSIDERED OPINION, T HAT THE LEARNED A.O. IS NOT JUSTIFIED IN CHARGING F.B. TAX U/S 115WC(1) (C) OF RS. 7,480/- AS THE SAME IS NEITHER CALLED FOR NOR WARRANTED UND ER THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE AND THE FBT OF RS. 7, 480/- IS HEREBY DELETED. HENCE ALL THE SIX GROUNDS OF APPEAL ARE DI SPOSED OF ACCORDINGLY IN FAVOUR OF THE APPELLANT. 7. IN THE RESULT, THE APPEAL IS ALLOWED. 14. THUS, THE ORDER DATED 28.09.2011 PASSED BY THE L EARNED CIT(A) HAS EFFECTIVELY WIPED OFF THE FBT FRINGE BENEFITS A SSESSMENT MADE ON THE ASSESSEE VIDE ORDER DATED 28.12.2010(SUPRA). 15. UNDISPUTEDLY, THE AFORESAID ORDER DATED 28.09.20 11 PASSED BY THE LEARNED CIT(A) EFFACING THE FRINGE BENEFITS AS SESSMENT OF THE ASSESSEE, HAS ATTAINED FINALITY, INASMUCH AS, IT HA S NOT BEEN CHALLENGED BY THE DEPARTMENT BY WAY OF APPEAL. NO MISCELLANEOUS A PPLICATION IS ALSO STATED TO HAVE BEEN FILED BEFORE THE LEARNED CIT(A) . 16. THE ABOVE FACTS, AS IS APPARENT FROM THE RELEVAN T PORTION OF THE IMPUGNED ORDER, AS REPRODUCED HEREINABOVE, HAVE ERR ONEOUSLY NOT BEEN TAKEN INTO CONSIDERATION BY THE LEARNED CIT(A) WHIL E CONFIRMING THE PENALTY IMPOSED ON THE ASSESSEE. THE IMPUGNED ORDER , THEREFORE, IS AN ORDER RENDERED IN OBLIVION OF THE ABOVE FACTS, AS P ATENT ON RECORD, BEFORE 11 I.T.A. NO. 219(ASR)/2013 ASSESSMENT YEAR: 2006-07 THE LEARNED CIT(A). THEREBY, THE ORDER UNDER APPEAL IS AN ORDER PASSED AS A RESULT OF COMPLETE MISREADING AND NON-READING OF MATERIAL EVIDENCE BROUGHT ON RECORD. 17. IN VIEW OF ABOVE, THE ORDER UNDER APPEAL IS LIAB LE TO BE CANCELLED. ACCORDINGLY, THE IMPUGNED ORDER DATED 19 .02.2013 PASSED BY LEARNED CIT(A), BATHINDA, IS CANCELLED AND APPEAL O F THE ASSESSEE IS ALLOWED. 18. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST JULY, 2014 SD/- SD/- (B.P. JAIN) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 31 ST JULY, 2014 /RK/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE: M/S HARBANS SINGH SAT PAL SINGH, ANA J MANDI, TALWANDI, DIST. FEROZEPUR 2. ITO, WARD III(1), FEROZEPUR 3. THE CIT(A), 4. THE CIT, 5. THE SR DR, I.T.A.T., TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.