Anil Agarwal C/o M/s Sterlite Industries (India) Ltd, CHENNAI V. ACIT Co CLe VI (4), CHENNAI

ITA 2346/CHNY/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1196 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-03-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2004-2005
• Appeal Filed On: 31-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GURU BASHYAM IRS
• Keywords: Salary income
• Section: 147; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI BEFORE DR. O.K. NARAYANAN, VICE-PRESIDENT AND SHRI S.S.GODARA, JUDICIAL MEMBER I.T.A.NO. 2346/MDS/2012 ASSESSMENT YEAR : 2004-05 SHRI ANIL AGARWAL, C/O M/S. STERLITE INDUSTRIES (INDIA) LTD., NO.I SAI FLATS, NO.55, PILLAIYAR KOIL STREET, KANAGAM, TARAMANI. CHENNAI 600 113. PAN AFWPA3200K VS. THE ASSISTANT COMMISSIONER OF INCOME-TAX , COMPANY CIRCLE VI-4, CHENNAI-34. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAMESH KUMAR PATODIA, FCA RESPONDENT BY : SHRI GURU BASHYAM, IRS, J CIT DATE OF HEARING : 6 TH MARCH, 2013 DATE OF PRONOUNCEMENT : 6 TH MARCH, 2013 O R D E R PER DR. O.K. NARAYANAN, VICE-PRESIDENT THIS APPEAL FILED BY THE ASSESSEE RELATES TO THE AS SESSMENT YEAR 2004-05 AND IT IS DIRECTED AGAINST THE ORDER O F THE COMMISSIONER OF INCOME-TAX(APPEALS)-V AT CHENNAI, D ATED 29.10.2012. THE APPEAL ARISES OUT OF THE ASSESSMEN T COMPLETED ITA 2346/12 :- 2 -: UNDER SEC.143(3), READ WITH SECTION 147 OF THE INCO ME-TAX ACT, 1961. 2. THE ONLY ISSUE RAISED BY THE ASSESSEE ON MERIT I S THAT THE COMMISSIONER OF INCOME-TAX(APPEALS) HAS ERRED IN CO NFIRMING THE ADDITION MADE BY THE ASSESSING OFFICER AGAINST THE CONTRIBUTION BY THE EMPLOYER TO THE SUPERANNUATION FUND AS INCOM E UNDER THE HEAD INCOME FROM SALARY. 3. THE EMPLOYER OF THE ASSESSEE HAS IMPLEMENTED A SUPERANNUATION SCHEME FOR ITS EMPLOYEES SUBSCRIBING TO THE POLICY OF LIC. THE EMPLOYEES AS WELL AS THE EMPLOY ER HAVE CONTRIBUTED TO THE SUPERANNUATION FUND. THE CASE O F THE ASSESSEE IS THAT THE ASSESSING OFFICER TREATED THE CONTRIBUTION OF THE EMPLOYER TO THE SUPERANNUATION FUND AS INCOME F ROM SALARY OF THE ASSESSEE UNDER SEC.17(2)(VIII) OF THE ACT. 4. AS FAR AS THE SUPERANNUATION FUND IS CONCERNED, THE CONTRIBUTION OF THE EMPLOYER WAS EXEMPTED FOR THE I MPUGNED ASSESSMENT YEAR. THIS POSITION IS CLEAR FROM THE A MENDMENT BROUGHT IN BY THE FINANCE (NO.2) ACT, 2009 BY INSER TING CLAUSE (VII) TO SEC.17(2). THE SAID CLAUSE PROVIDES THAT THE AMOUNT OF ITA 2346/12 :- 3 -: ANY CONTRIBUTION TO AN APPROVED SUPERANNUATION FUND BY THE EMPLOYER IN RESPECT OF THE ASSESSEE, TO THE EXTENT IT EXCEEDS ONE LAKH RUPEES, IS TO BE TREATED AS PERQUISITES LIABLE FOR TAXATION. THIS PROVISION CAME INTO FORCE WITH EFFECT FROM THE ASSESSMENT YEAR 2010-11. EARLIER THE AMOUNT OF SUPERANNUATION WAS CHARGEABLE TO FRINGE BENEFIT TAX(FBT) IN THE HANDS OF THE EMPLOYER. THE PROVISIONS OF FBT ARE CONTAINED IN CHAPTER XII-H, WHICH WAS INSERTED BY THE FINANCE ACT, 2005 WITH EF FECT FROM 1.4.2006. IT IS AN ACCEPTED FACT THAT EMPLOYERS C ONTRIBUTION TO THE SUPERANNUATION FUND WAS NOT TAXABLE BEFORE THE INTR ODUCTION OF FBT, WHICH CAME INTO FORCE WITH EFFECT FROM 2006-07 . 5. IN THESE CIRCUMSTANCES, WE DELETE THE ADDITION M ADE BY THE ASSESSING AUTHORITY AGAINST THE EMPLOYERS CONTRIBU TION TO THE SUPERANNUATION FUND. 6. THE REMAINING GROUNDS RAISED BY THE ASSESSEE ARE RELATING TO THE VALIDITY OF ISSUE OF NOTICE UNDER SEC.148 AN D CONSEQUENTIAL INCOME ESCAPING ASSESSMENT COMPLETED UNDER SEC.147. AS THE APPEAL HAS BEEN DECIDED ON MERIT ITSELF, THERE IS N O NEED OF DISCUSSION ON THE RESIDUAL GROUNDS, AS IT WOULD BE ONLY ACADEMIC. ITA 2346/12 :- 4 -: 7. IN RESULT, THIS APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING ON WEDNESDAY, THE 6 TH OF MARCH, 2013 AT CHENNAI. SD/- SD/- (S.S.GODARA) (DR.O.K .NARAYANAN) JUDICIAL MEMBER VICE-PRESIDENT CHENNAI, DATED THE 6 TH MARCH, 2013 MPO* COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GF.