DCIT Circle-47 (1), New Delhi V. Masanori Shivatori, New Delhi

ITA 2427/DEL/2008

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 0630 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 6 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-01-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 11-01-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 01-07-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K RAVICHANDARAN
• Assessee Lawyers: A J MAJUMDAR

Judgement Text

I.T.A. NO.2427 /DEL/08 1/5 IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E NEW DELHI) BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER I.T.A. NO.2427/DEL/2008 ASSESSMENT YEAR : 2004-05 DCIT. SHRI MASANORTI SHIVATORI, CIRCLE-47 (1), C/O RICOH (I) LTD., NEW DELHI. V. 52B, IST FLOOR, OKHLA INDL. AREA, NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K. RAVICHANDARAN, SR. DR. RESPONDENT BY : SHRI A.J. MAJUMDAR, C.A. ORDER PER A.K. GARODIA, AM: THIS IS REVENUE'S APPEAL FILED AGAINST THE ORDER OF LD CIT(A)-XXX, NEW DELHI DATED 15.4.2008 FOR ASSESSMENT YEAR 2004-05. 2. GROUND NO.1 IS AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) HAS ERRED IN: I) DELETING THE ADDITION OF `.2,72,775/- BEING ENHA NCEMENT IN THE PERQUISITE VALUE OF RENT FREE ACCOMMODATION AS A RESUL T OF INCLUSION OF THE TAX BORNE BY THE EMPLOYER ON NON MO NETARY PERQUISITE IN SALARY FOR THE PURPOSE OF CALCULATING T HE SAID PERQUISITE VALUE. . I.T.A. NO.2427/DEL/08 2/5 3. IT IS SUBMITTED BY THE LD AR OF THE ASSESSEE THAT THI S ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL DECISI ON IN THE CASE OF DCIT V. SRI HIROYASU KITADA, IN I.T.A. NO.1110/DE L/2008 DATED 27.3.2009. HE SUBMITTED A COPY OF THIS TRIBUNAL DECISI ON. LD DR OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE GONE TH ROUGH THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT IN THE P RESENT CASE, THE ASSESSING OFFICER HAS MADE ADDITION IN THE VALUATION OF PERQUISITE VALUE OF RENT FREE ACCOMMODATION BY ADDING THE TAX PAID BY THE EMPLOYER IN THE SALARY OF THE ASSESSEE. IN THE CASE OF DC IT V. SRI HIROYASU KITADA (SUPRA) ALSO, WHILE COMPUTING THE VAL UE OF RENT FREE ACCOMMODATION, THE ASSESSING OFFICER HAS TAKEN THE TAX B ORNE BY THE EMPLOYER AS PERQUISITE AND THEREBY TAXABLE RENT FREE ACCOMMODATION HAS BEEN ASSESSED AT `.7,99,007/- IN PLACE OF `.6,09,136 /- DECLARED BY THE ASSESSEE. THE TRIBUNAL HAS REFERRED TO THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL RENDERED IN THE CASE OF RBF RI G CORPORATION LLC V. ACIT AS REPORTED IN 109 ITD 141 (SB) AND IT WAS HE LD THAT THE TAX PAID BY THE EMPLOYER ON BEHALF OF THE EMPLOYEE IS A PERQUISITE COVERED BY SUB CLAUSE (IV) OF SECTION 17(2) AND NOT A MONETARY PAYMENT TO THE EMPLOYEE AND THEREFORE IT IS ELIGIBLE FOR EXEMPTION U/S 10(10CC) OF THE ACT. BY FOLLOWING THIS DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL, IT WAS HELD THAT LD CIT(A) WAS JUSTIFIED IN ALLOWING RE LIEF TO THE ASSESSEE ON THIS ACCOUNT BY FOLLOWING THIS DECISION OF THE SPEC IAL BENCH OF THE TRIBUNAL. SINCE THE FACTS IN THE PRESENT CASE ARE SIMIL AR, IN THE PRESENT CASE ALSO, WE APPROVE THE ORDER OF LD CIT(A) ON THIS I SSUE BY RESPECTFULLY FOLLOWING THIS TRIBUNAL DECISION AND ALSO THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL RENDERED IN THE CASE O F RBF RIG CORPORATION (SUPRA). GROUND NO.1 OF THE REVENUE IS RE JECTED. . I.T.A. NO.2427/DEL/08 3/5 5. GROUND NO.2 OF THE APPEAL IS AS UNDER:- DELETING THE ADDITION OF `.4,42,449/- MADE ON ACCO UNT OF CONTRIBUTION MADE BY THE ASSESSEES EMPLOYER TOWARDS SOC IAL SECURITY PLAN. 6. REGARDING THIS GROUND, LD DR OF THE REVENUE SUPPOR TED THE ASSESSMENT ORDER AND IT WAS SUBMITTED BY THE LD AR OF THE ASSESSEE THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE AS PER THE TRIBUNAL DECISION RENDERED IN THE CASE OF ACIT V. MATHEW GOTTE SMAN AS REPORTED IN 2007 TIOL-320-ITAT-DEL. IT IS ALSO SUBMIT TED THAT THE COPY OF THIS TRIBUNAL DECISION IS AVAILABLE ON PAGE NO.38-4 3 OF THE PAPER BOOK. IT IS POINTED OUT THAT IN THAT CASE ALSO, THE ON LY GROUND RAISED BY THE REVENUE WAS THAT LD CIT(A) HAS ERRED IN DELETING THE ADDITION OF `.1.85 LAKHS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF SOCIAL SECURITY CONTRIBUTION. AS PER PARA NO.11 OF THIS TRIBU NAL DECISION, IT WAS HELD BY THE TRIBUNAL THAT EMPLOYERS SHARE OF SOCIAL SE CURITY CONTRIBUTION IS NOT TAXABLE IN THE HANDS OF THE ASSESSEE SINCE HE DOES NOT HAVE ANY VESTED RIGHTS THEREIN TILL HE ATTAINED THE AGE OF RETIREMENT. IT IS POINTED OUT THAT IN THE PRESENT CASE ALSO, THE AMOUNT ACCUMULATED IN THE EMPLOYEES PENSION INSURANCE BENEFIT IS PAYABLE TO THE ASSESSEE AFTER HE REACHES 65 YEARS OF AGE PROVIDED HE CONTRIBUTE TO SUCH A SCHEME FOR AT LEAST 25 YEARS. IT IS ALSO SUBMITT ED THAT THE DATE OF BIRTH OF THE ASSESSEE IS 21.3.1957 AND HENCE, HE SHOULD ATTAIN THE AGE OF 65 YEARS ONLY IN MARCH, 2022. 7. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LD AR OF T HE ASSESSEE AND RESPECTFULLY FOLLOWING THE TRIBUNAL DECISION CITED ABOVE, WE DECIDE THIS ISSUE ALSO IN FAVOUR OF THE ASSESSEE BECAUSE THE FACTS ARE SIMILAR. . I.T.A. NO.2427/DEL/08 4/5 8. GROUND NO.3 IS AS UNDER:- DELETING THE ADDITION OF `.17,01,522/- MADE ON ACC OUNT OF GROSSING UP U/S 195A OF THE TAX BORNE BY THE EMPLOYER ON NON MONETARY PERQUISITE. 9. LD DR OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER WHEREAS IT IS SUBMITTED BY THE LD AR OF THE ASSESSEE THAT THIS ISSUE I S ALSO COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL RENDERED IN THE CASE OF RBF RIG CORP ORATION AS REPORTED IN 109 ITD 141. 10. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE GONE T HROUGH THE MATERIAL AVAILABLE ON RECORD. SINCE THIS ISSUE IS SQUAR ELY COVERED BY THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL CI TED BY THE LD AR OF THE ASSESSEE, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF LD CIT(A) ON THIS ISSUE ALSO. THIS GROUND IS ALSO REJECTED. 11. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. 12. ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH DAY OF JANUARY, 2011. SD/- SD/- (I.P. BANSAL) (A.K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER DT.14.1.2011. HMS COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. BY ORDER (ITAT, NEW DELHI). . I.T.A. NO.2427/DEL/08 5/5