Ledermart India Private Limited, CHENNAI V. ITO, CHENNAI

ITA 34/CHNY/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9561 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 01-03-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 07-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Assessee Lawyers: K MENNAKSHISUNDHARAM ITP

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , C B ENCH, CHENNAI . , . , # $ BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI G.PAVAN KUMAR, JUDICIAL MEMBER ./ I.T.A.NO.34/MDS/2016 ( / ASSESSMENT YEAR: 2008-09) M/S .LEDERMART INDIA PVT.LTD., 203, VELACHERY MAIN ROAD, VELACHERY, CHENNAI-600 042. VS THE INCOME TAX OFFICER, COMPANY WARD-II(1), CHENNAI. PAN: AAACL1580B ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. K.MENNAKSHISUNDHARAM, ITP /RESPONDENT BY : MR. A.V.SREEKANTH, JCIT /DATE OF HEARING : 1 ST MARCH, 2016 /DATE OF PRONOUNCEMENT : 4 TH MAY, 2016 / O R D E R PER A. MOHAN ALANKAMONY, AM:- THIS APPEAL IS FILED BY THE ASSESSEE AGGRIEVED BY T HE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APP EALS)- 8, CHENNAI, DATED 26.10.2015 IN25/2010-11 PASSED UN DER SECTION 115WE(3) R.W.S. 250(6) OF THE ACT. 2. THE ASSESSEE HAS RAISED SEVERAL GROUNDS IN HIS A PPEAL, HOWEVER, THE CRUX OF THE ISSUE IS THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE ADDITION MADE BY THE LEARNED ASSESSI NG OFFICER WHO HAS DISALLOWED 20% OF THE REIMBURSEMENT OF 2 ITA NO.34 /MDS/2016 CONVEYANCE EXPENSE AMOUNTING TO RS.1,23,885/- INVOK ING THE PROVISIONS OF SECTION 115WB R.W.S 115WE OF THE ACT. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A COMPANY ENGAGED IN MANUFACTURING OF LEATHER PRODUCT S FILED ITS RETURN DECLARING LOSS CUM FRINGE BENEFITS FOR THE ASSESSMENT YEAR 2008-09 ON 25.09.2008 FOR THE VALUE OF FRINGE BENEFITS AS RS.77,020/-. DURING THE COURSE O F PROCEEDINGS UNDER SECTION 115WE(3) OF THE ACT, THE LEARNED ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD REI MBURSED CONVEYANCE EXPENSES OF RS. 6,19,425/-. THE LEARNED ASSESSING OFFICER OPINED THAT THE PROVISIONS OF SEC TION 115WE OF THE ACT WOULD BE ATTRACTED ON THE REIMBURS EMENT OF CONVEYANCE EXPENSE AND ACCORDINGLY 20% OF RS.6,19,425/- WAS ADDED TO THE VALUE OF FRINGE BENE FITS RETURNED BY THE ASSESSEE. ON APPEAL, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE ORDER OF THE LEARNED ASSESSING OFFICER BY REFERRING TO TH E PROVISIONS OF THE ACT AND THE CIRCULAR NO.8 DATED 29.08.2005 O F THE CBDT IN RELATION TO THE FRINGE BENEFIT TAX. 3 ITA NO.34 /MDS/2016 4. BEFORE US, THE LEARNED AUTHORIZED REPRESENTATIVE SUBMITTED THAT THE ASSESSEE HAD ONLY REIMBURSED THE EXPENSES INCURRED BY THE EMPLOYEES TOWARDS CONVEYAN CE FOR THE PURPOSE OF THE BUSINESS OF THE ASSESSEE AND THE REFORE, THE PROVISIONS OF SECTION 115WE OF THE ACT WOULD NO T BE ATTRACTED. HE FURTHER ARGUED BY STATING THAT THE AS SESSEE HAD EXPLAINED BEFORE THE REVENUE THAT THE ASSESSEE HAD REIMBURSED A PORTION OF THE TRANSPORTATION EXPENSE INCURRED BY THEIR STAFF IN ORDER TO SUBSIDIZE THE HIGH COST, HOWEVER NEITHER THE LEARNED ASSESSING OFFICER NOR THE LEARN ED CIT(A) LOOKED INTO THESE ASPECTS. HE THEREFORE PLEADED TH AT THE ADDITION MADE FOR RS.1,23,885/- BY INVOKING THE PRO VISIONS OF SECTION 115WE(E) OF THE ACT MAY BE DELETED. 5. THE LEARNED DEPARTMENTAL REPRESENTATIVE ON THE O THER HAND, ARGUED IN SUPPORT OF THE ORDERS OF THE REVENU E. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y PERUSED THE MATERIALS AVAILABLE ON RECORD. FROM THE FACTS OF THE CASE, IT IS APPARENT THAT THE ASSESSEE HAS INCU RRED THE CONVEYANCE EXPENDITURE FOR THE PURPOSE OF ITS BUSIN ESS AND 4 ITA NO.34 /MDS/2016 NOT FOR GRANTING ANY BENEFIT TO ITS EMPLOYEES. MORE OVER THE ASSESSEES REPRESENTATIVE HAD CATEGORICALLY EXPLAIN ED BEFORE THE REVENUE THAT THE REIMBURSEMENT OF CONVEYANCE EX PENSE WAS ONLY FOR THE PURPOSE OF SUBSIDIZING THE HIGH TRANSPORTATION COST SUFFERED BY THE EMPLOYEES OF TH E ASSESSEE. AS RIGHTLY POINTED OUT BY THE LEARNED ASS ESSEES REPRESENTATIVE THE REVENUE HAS NOT LOOKED INTO THES E ASPECTS AND ALSO NOT MADE ANY MENTION ABOUT THE SAM E IN THEIR RESPECTIVE ORDERS. THIS SHOWS THAT THE REVENU E IS AWARE OF THESE FACTS. THE STATEMENT OF FACTS FILED BY THE ASSESSEE BEFORE THE REVENUE ALSO PROVES THE SAME. F URTHER THE PROVISIONS OF SECTION 115WB(3) OF THE ACT MAKE S IT CLEAR THAT FOR THE PURPOSE OF 115WB(1) OF THE ACT, THE PR IVILEGE, SERVICE, FACILITY OR AMENITY DOES NOT INCLUDE ANY B ENEFIT OR AMENITY PROVIDED BY THE EMPLOYER TO ITS EMPLOYEES TOWARDS TRANSPORTATION OF THE EMPLOYEES FROM THEIR RESIDENC E TO THE WORK PLACE AND BACK. THEREFORE WE ARE OF THE CONSID ERED VIEW THAT THE PROVISIONS OF SECTION 115WB OF THE AC T WILL NOT BE APPLICABLE TO THE CASE OF THE ASSESSEE BECAUSE T HE ASSESSEE HAS ONLY REIMBURSED THE CONVEYANCE EXPENSE INCURRED BY THE ASSESSEES STAFF FOR TRAVELLING FRO M THEIR 5 ITA NO.34 /MDS/2016 RESPECTIVE HOME TO PLACE OF WORK AND BACK. ACCORDIN GLY, WE HEREBY DIRECT THE LEARNED ASSESSING OFFICER TO DELE TE THE ADDITION OF RS.1,23,885/- MAD BY INVOKING THE PROVI SIONS OF SECTION 115WB OF THE ACT. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 4 TH MAY, 2016 SD/- SD/- ( . ) ( . ) (G.PAVAN KUMAR) ( A.MOHAN ALANKAM ONY ) # % / JUDICIAL MEMBER % / ACCOUNTANT MEMBER # /CHENNAI, ( /DATED 4 TH MAY, 2016 SOMU *+ ,+ /COPY TO: 1. APPELLANT 2. RESPONDENT 3. - () /CIT(A) 4. - /CIT 5. + 1 /DR 6. /