The Poona Stud Farm Pvt. Ltd., Pune V. Income-tax Officer,

ITA 394/PUN/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 9385 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 10 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 10-03-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Business expenditure
• Section: 80C

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI ANIL CHATURVEDI, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.394/PUN/2016 / ASSESSMENT YEAR : 2006-07 THE POONA STUD FARM PVT. LTD., 16 / B 1, SAROSH BHAVAN, DR. AMBEDKAR ROAD, PUNE 411 001. PAN : AAACT6849F. . / APPELLANT V/S INCOME TAX OFFICER (TECH & JUDL.)-IV, PUNE. . / RESPONDENT ASSESSEE BY : SHRI NIKHIL PATHAK & SHRI VISHNU BHUTADA. REVENUE BY : SHRI ACHAL SHARMA, ADDL.CIT. / ORDER PER ANIL CHATURVEDI, AM : 1. THIS APPEAL FILED BY THE ASSESSEE U/S 253 OF THE ACT IS EMANATING OUT OF THE ORDER OF COMMISSIONER OF INCOME TA X (A) - PUNE 5, PUNE DT.28.01.2016 FOR THE ASSESSMENT YEAR 2006-07. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON R ECORD ARE AS UNDER :- 2.1 ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF BRE EDING, REARING AND SALE OF RACE HORSES. ASSESSEE ELECTRONICALLY FILED FRINGE BENEFIT TAX (FBT) RETURN FOR A.Y. 2006-07 ON 25.11.2006 SHO WING / DATE OF HEARING : 30.01.2018 / DATE OF PRONOUNCEMENT: 31.01.2018 2 TOTAL VALUE OF FRINGE BENEFITS AT RS.1,66,827/-. THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER ASSESSMENT WAS FRAMED U/S 1 15WE(3) OF THE ACT VIDE ORDER DT.29.12.2008 AND THE TOTAL VALUE OF FRIN GE BENEFIT WAS DETERMINED AT RS.4,98,290/-. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO VIDE ORD ER DT.28.01.2016 (IN APPEAL NO.PN/CIT(A)-5/ITO, TECH & JUD IV/RG- 07/PUNE/12/2008-09) DISMISSED THE APPEAL OF THE ASSESSE E. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW IN APP EAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS : 1. THE LD.CIT(A) ERRED IN CHARGING FRINGE BENEFIT TAX (IGNORING THE PROVISIONS OF SEC.115WA) ON EXPENSES INCURRED BY AP PELLANT ON PERSONS WHO ARE NOT ITS EMPLOYEES. 2. THE LD.CIT(A) ERRED IN ASSESSING FRINGE BENEFIT (FB) AND IMPOSING TAX THEREON ON FOLLOWING EXPENSES INCURRED BY THE APPELLANT (STATED IN THE COLUMN DISPUTED AMOUNT OF FB) SR NO EXPENDITURE % AS PER FB AS PER DISPUTED AMOUNT OF FB NOMENCLATURE AMOUNT APLANT A.O. APLANT A.O. 1 CONTRIBUTION TO APPROVED SUPER- ANNUATION FUND. 3,37,038 100% (ABOVE RS.1 LAC PER EMPLOYEE) 100% 1,10,784 3,37,038 2,26,254 (1) 2 PERSONAL ACCIDENT INSURANCE PREMIUM 31,233 NIL% 20% NIL 31,233 31,233 (2) 3 MEDICAL REIMBURSE- MENT 15,000 NIL% 20% NIL 15,000 15,000 (3) 4 CONVEYANCE EXPENSES 34,000 NIL% 20% NIL 6,800 6,800 (4) 5 TOUR & TRAVEL EXPENDITURE 4,49,358 5% 20% 22,468 89,872 67,404 (5) 3. BEFORE US, LD.A.R. SUBMITTED THAT HE DOES NOT WISH TO PR ESS GROUND NO.1 AND THE SAME IS THEREFORE DISMISSED AS NOT PRESSED. 4. (A) DURING THE COURSE OF ASSESSMENT PROCEEDINGS, AO NOTICED THAT ASSESSEE HAS CONTRIBUTED TO APPROVED SUPERANNUATION FUND OF RS.3,37,038/- BUT HAD CONSIDERED 3 ONLY AN AMOUNT OF RS.1,10,784/- FOR CALCULATION OF VALUE OF FBT AS IT WAS OF THE VIEW THAT THE AMENDMENT TO SEC.115WC(1)(B) BY THE FINANCE ACT, 2006 STATING THAT CONTRIBUTION TO SUPERANNUATION FUND IN EXCESS OF RS.1,00,000/- PER EMPLOYEE IS LIABLE TO FBT IS CLARIFICATORY IN NATURE AND THEREFORE WOULD APPLY TO THE ASSESSMENT YE AR UNDER CONSIDERATION. THE ASSESSEE THEREFORE CONSIDERED ONLY RS.1,10,784/- AS FBT. THE SUBMISSION OF THE ASSESSEE WAS NOT FOUND ACCEPTABLE TO THE AO. HE CONSIDERED THE TOTA L VALUE OF RS.3,37,038/- AS THE VALUE OF FBT AND AFTER GIVING CREDIT TO RS.1,10,784/- WHICH WAS OFFERED BY ASSESSEE, DETERMINED TH E BALANCE AMOUNT OF RS.2,26,254/- AS VALUE OF FBT. (B) AO ALSO NOTICED THAT OUT OF THE TOTAL EMPLOYEE WELFAR E EXPENDITURE OF RS.2,01,549/- ASSESSEE HAD CONSIDERED AN EXPENDITURE OF RS.31,233/- AS BEING LIABLE TO FBT. AO ON PERUSING THE DETAILS NOTICED THAT AN AMOUNT OF RS.39,989/- REPRESENTING THE PAYMENT OF PERSONAL ACCIDENT PREMIUM WHICH WAS PAID FOR THE BENEFITS OF THE EMPLOYEES HAS NOT BEEN CONSIDERED BY THE ASSESSEE WHILE ARRIVING AT THE VALUE OF FBT. HE ACCORDINGLY CONSIDERED 20% OF THE SAME AS THE VALUE OF THE FRINGE BENEFIT. HE ALSO NOTICED THAT ASSESSEE HAD PAID AN AMOUNT OF RS.15,000/- TOWARDS MEDICAL REIMBURSEMENT WHICH WAS NOT CONSIDERED FOR THE PURPOSE OF FRINGE BENEFIT BASED ON THE CLARIFICATORY CIRCULAR OF CBDT 8 OF 2005 DT.29.08.2005. AO WAS OF THE VIEW THAT WHEN THE REIMBURSEMENT EXCEEDS RS.15,000/-, THE SAME IS TO BE 4 CONSIDERED FOR VALUATION OF FRINGE BENEFIT. HE ACCORDINGLY CONSIDERED THE AMOUNT OF MEDICAL REIMBURSEMENT OF RS.15,000/- FOR THE PURPOSE OF FRINGE BENEFIT. (C). AO NOTICED THAT ASSESSEE HAD INCURRED TOTAL EXPENDIT URE OF RS.72,308/- AS CONVEYANCE EXPENSES BUT IT HAD CONSIDE RED AN EXPENDITURE ONLY OF RS.38,308/- AS BEING LIABLE FOR FRINGE BENEFIT TAX. ON PERUSING THE DETAILS AO NOTICED THAT AN AMOUNT OF RS.34,000/- WHICH REPRESENTED THE CONVEYANCE CHARGES PAID TO THE DIRECTORS WERE NOT CONSIDERED BY T HE ASSESSEE WHILE ARRIVING AT THE VALUE OF FBT. HE ACCORDINGL Y CONSIDERED THE AMOUNT OF CONVEYANCE CHARGES PAID TO T HE DIRECTORS (RS.34,000/-) AS TO BE LIABLE FOR FBT. (D). AO NOTICED THAT ASSESSEE HAD INCURRED EXPENDITURE O F RS.4,49,358/- TOWARDS TOUR AND TRAVEL EXPENDITURE. ASSE SSEE AFTER CONSIDERING THE AMENDMENT BY FINANCE ACT OFFERED ON LY 5% OF THE EXPENSES ON TOUR AND TRAVEL EXPENDITURE TO B E LIABLE FOR FBT AS IT WAS OF THE VIEW THAT THE AMENDMENT MADE B Y FINANCE ACT WAS CLARIFICATORY IN NATURE. THE SUBMISSION OF T HE ASSESSEE WAS NOT FOUND ACCEPTABLE TO THE AO. HE CONSID ERED THE ENTIRE AMOUNT ON TOUR AND TRAVEL EXPENDITURE OF RS.4,49,358/- AS THE FRINGE BENEFIT. 5. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MA TTER BEFORE LD.CIT(A), WHO UPHELD THE ORDER OF AO. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US. 5 6. BEFORE US, LD.A.R. POINTED TO THE TABLE BELOW GROUND NO. 2. FROM THE AFORESAID TABLE HE SUBMITTED THAT ASSESSEE DO ES NOT WISH TO PRESS THE GROUND WITH RESPECT TO TOUR AND TRAVEL E XPENDITURE OF RS.4,49,358/-. WITH RESPECT TO THE PERSONAL ACCIDENTAL PRE MIUM OF RS.31,233/-, HE FAIRLY CONCEDED THAT IDENTICAL ISSUE AROSE B EFORE THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF INTERVALVE (IN DIA) LIMITED IN ITA NO.1262/PN/2010 ORDER DT.20.06.2012 AND THIS ISSUE HAS BEEN DECIDED AGAINST THE ASSESSEE VIDE PARA NO.14 OF THE ORDER. HE THEREFORE SUBMITTED THAT THIS ISSUE BE DECIDED ACCORDINGLY. 7. (A). WITH RESPECT TO THE EXPENDITURE OF MEDICAL REIMBURSEMENT OF RS.15,000/- HE SUBMITTED THAT AN IDENTICA L ISSUE AROSE BEFORE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF INTERVALVE (INDIA) LTD., (SUPRA) AND THE ISSUE HAS BEEN DEC IDED IN FAVOUR OF THE ASSESSEE AT PARA NO.15 OF THE ORDER. H E THEREFORE SUBMITTED THAT RELYING ON THE AFORESAID ORDER OF THE PUNE BENCH OF THE TRIBUNAL, THE GROUND BE DECIDED IN ASSESSEES FAVOUR. (B). WITH RESPECT TO THE CONTRIBUTION TOWARDS APPROVED SUPERANNUATION FUND OF RS.3,37,038/- HE SUBMITTED THAT IDENTICAL ISSUE AROSE BEFORE THE JAIPUR BENCH OF THE TRIBUN AL IN THE CASE OF DCIT VS. STATE BANK OF BIKANER & JAIPUR IN ITA NO.548/JP/2011 ORDER DT.21.10.2011. THE CO-ORDINATE BENC H OF THE TRIBUNAL OF JAIPUR AFTER RELYING ON THE DECISIONS OF JAIPUR TRIBUNAL IN THE CASE OF RAJASTHAN RAJYA VIDYUT 6 UTPADAN NIGAM LIMITED THE SPEECH OF FINANCE MINISTER AND THE MEMORANDUM OF EXPLAINING THE PROVISIONS OF THE BILL AND THEREAFTER HELD THAT THE AMENDMENT MADE TO SEC.115WB(1 )(C) BY FINANCE ACT IS RETROSPECTIVE AND IS APPLICABLE TO ASSESSMENT YEAR 2006-07. HE SUBMITTED THAT IN THE CASE OF ASSESS EE, THE ASSESSMENT YEAR INVOLVED IS A.Y. 2006-07 AND THEREFORE RE LYING ON THE DECISION OF JAIPUR BENCH OF THE TRIBUNAL, THE ISSUE BE DECIDED ACCORDINGLY. (C). WITH RESPECT TO THE CONVEYANCE EXPENSES OF RS.34,000 /-, HE POINTED TO THE SUBMISSIONS MADE BEFORE LD.CIT(A) AND SUBMITTED THAT IT WAS INCURRED FOR THE CONVEYANCE EXPEN SES OF NON-EXECUTIVE DIRECTORS AND CONSULTANTS, WHO WERE NOT T HE EMPLOYEES OF THE ASSESSEE. HE SUBMITTED THAT SINCE THE SE PERSONS ARE NOT THE EMPLOYEES OF THE ASSESSEE, THE QUE STION OF PAYING FBT DOES NOT ARISE AND FOR THIS PROPOSITION, HE RELIE D ON THE DECISIONS IN THE CASE OF DCIT VS. KOTAK MAHINDRA OLD MUTUAL LIFE INSURANCE LTD., REPORTED IN 134 ITD 388 (MUM) AND JOSHI TECHNOLOGY INTERNATIONAL INCORPORATION REPORTE D IN 157 TTJ 468 (AHD). LD.D.R. ON THE OTHER HAND, SUPPORTED THE ORDER OF AO. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPE CT TO CONSIDERATION OF FRINGE BENEFIT OF THE VARIOUS EXPENSES. BEFO RE US, LD.A.R. HAS SUBMITTED THAT HE DOES NOT WISH TO DISPUTE TH E FRINGE BENEFIT WITH RESPECT TO TOUR AND TRAVEL EXPENDITURE OF RS .4,49,358/-. 7 WITH RESPECT TO THE EXPENDITURE OF PERSONAL ACCIDENT PRE MIUM, WE FIND THAT THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF I NTERVALVE (INDIA) LTD., (SUPRA) HAS DECIDED THE ISSUE AGAINST THE ASS ESSEE BY HOLDING AS UNDER : 14. IN GROUND NO. (4), THE ASSESSEE CLAIMS THAT FB T HAS BEEN WRONGLY CHARGED WITH RESPECT TO THE INSURANCE PREMI UM PAID OF RS 22,561/- ON GROUP ACCIDENT POLICY. THE CLAIM OF THE ASSESSEE IS THAT IN TERMS OF SECTION 115WB(2)(E) EXPENSES ON EMPLOYE ES WELFARE WHICH ARE OTHER THAN THE EXCEPTIONS PROVIDED THERE IN ARE NOT LIABLE TO BE CONSIDERED FOR LEVY OF FBT. AS PER THE ASSESSEE, IT IS ENGAGED IN THE BUSINESS OF MANUFACTURE OF ENGINEERING PRODUCTS AND IT HAS TAKEN AN ACCIDENTAL INSURANCE POLICY COVERING ITS EMPLOYE ES FOR LOSS OF LIFE, MEDICAL TREATMENT IF MET WITH AN ACCIDENT. THE ASSE SSEE SUBMITS THAT IN TERMS OF EXPLANATION TO SECTION 115WB(2)(E) ANY EXPENDITURE ON EMPLOYEES WELFARE INCURRED TO FULFILL ANY STATUTOR Y OBLIGATION OR MITIGATE OCCUPATIONAL HAZARDS, ETC., IS ALSO NOT LI ABLE TO BE CONSIDERED FOR LEVY OF FBT AND THAT IN THE PRESENT CASE, SUCH EXPENDITURE IS OF THE NATURE COVERED BY SUCH EXPLANATION TO SECTION 1 15WB(2)(E) OF THE ACT. WE FIND THAT THE COMMISSIONER OF INCOME-TAX ( APPEALS) HAS OBSERVED THAT THE IMPUGNED EXPENDITURE IS NOT ON AC COUNT OF A STATUTORY OBLIGATION AND, THEREFORE, THE SAME DOES NOT FALL WITHIN THE EXCEPTIONS PROVIDED IN THE EXPLANATION TO SECTION 1 15WB(2)(E) OF THE ACT. ON THIS ASPECT, WE FIND NO COGENT CONTROVERSIO N ON THE PART OF THE ASSESSEE AND ACCORDINGLY THE ACTION OF THE COMMISSI ONER OF INCOME- TAX (APPEALS) ON THE BASIS OF REASONS CONTAINED THE REIN IS HEREBY AFFIRMED. THUS, ON THIS GROUND, THE ASSESSEE FAILS. 9. BEFORE US, ASSESSEE HAS NOT PLACED ANY CONTRARY BINDI NG DECISION IN ITS SUPPORT. IN VIEW OF THESE FACTS, ISSUE WITH R ESPECT TO THE EXPENDITURE OF PERSONAL ACCIDENT PREMIUM IS DECIDED AG AINST THE ASSESSEE. 10. WITH RESPECT TO THE EXPENDITURE OF MEDICAL REIMBURSEM ENT OF RS.15,000/-, WE FIND THAT THE CO-ORDINATE BENCH OF THE TRI BUNAL IN THE CASE OF INTERVALVE (INDIA) LTD., (SUPRA) AFTER RELYING ON VARIOUS DECISIONS CITED IN THE ORDER, HAS DECIDED THE ISSUE IN FAV OUR OF ASSESSEE BY HOLDING AS UNDER : 15. GROUND NO. (5) IS WITH REGARD TO THE CHARGING OF FBT ON THE REIMBURSEMENT OF MEDICAL EXPENSES TO THE EXTENT OF RS 15,000/-. THE CONTENTION OF THE ASSESSEE IS THAT REIMBURSEMENT OF MEDICAL EXPENSES TO THE EXTENT OF RS 15,000/- IS EXEMPT IN THE HANDS OF THE EMPLOYEE 8 AND TO THE EXTENT OF SUCH EXEMPTED ALLOWANCE, IT WA S ALSO NOT LIABLE TO BE CONSIDERED FOR FBT IN THE HANDS OF EMPLOYER. IN THIS CONNECTION, WE FIND THAT OUR CO-ORDINATE BENCHES, NAMELY, THE M UMBAI BENCH OF THE TRIBUNAL IN THE CASE OF GODREJ PROPERTIES LTD. V. ADDL. CIT (2011) 16 TAXMANN.COM.298 (MUM) AND THE BANGALORE BENCH OF THE TRIBUNAL IN THE CASE OF BOSCH LD. V. DCIT (2011) 15 TAXMANN. COM.187 (BANG) HAVE OPINED THAT MEDICAL REIMBURSEMENT IS TAXABLE A S PERQUISITE IN THE HANDS OF INDIVIDUAL EMPLOYEES AND MERELY BECAUS E GRANT OF SUCH EXEMPTIONS, SAME CANNOT BE SAID TO BE A FRINGE BENE FIT FOR THE PURPOSES OF CHAPTER XII-H OF THE ACT. THUS, ON THIS GROUND, THE ASSESSEE SUCCEEDS. 11. BEFORE US, REVENUE HAS NOT PLACED ANY CONTRARY BINDI NG DECISION IN ITS SUPPORT. WE THEREFORE FOLLOWING THE DECISION LA ID DOWN BY PUNE BENCH OF THE TRIBUNAL IN THE CASE OF INTERV ALVE (INDIA) LTD., (SUPRA) HOLD THAT MEDICAL REIMBURSEMENT OF RS.15,000/- IS NOT LIABLE FOR FBT. 12. WITH RESPECT TO CONTRIBUTION OF APPROVED SUPERANNUAT ION FUND OF RS.3,37,038/-, WE FIND THAT THE JAIPUR BENCH OF THE TRIB UNAL IN THE CASE OF DCIT VS. STATE BANK OF BIKANER & JAIPUR (SUPR A) HAS HELD THAT THE AMENDMENT MADE TO SEC.115WB(1)(C) IS RETROS PECTIVE AND IS APPLICABLE FOR A.Y. 2006-07. THE OBSERVATIONS OF JAIP UR BENCH OF THE TRIBUNAL ARE AS UNDER : 3. THE TRIBUNAL VIDE ORDER DATED 27.11.2009 IN THE CASE OF RAJASTHAN RAJYA VIDYUT PRASARAN NIGAM LTD. CONSIDER ED THAT THE AMENDMENT HAS BEEN MADE AS WELFARE MEASURE FOR OVER WHELMING MAJORITY OF EMPLOYEES TO MAKE IT PARALLEL WITH THE DEDUCTION PROVIDED U/S 80C READ WITH SECTION 80CCD. SUCH VIEW WAS TAK EN AFTER COMBINED READING OF THE SPEECH OF FINANCE MINISTER AND THE MEMORANDUM EXPLAINING THE PROVISIONS OF THE BILL. IT WILL BE USEFUL TO REPRODUCED PARA 10 OF THE ORDER OF THE TRIBUNAL DAT ED 27.11.2009:- THE ABOVE PRINCIPLE OF INTERPRETATION LAID DOWN IN VARIOUS JUDGMENTS OF HON'BLE SUPREME COURT WHEN READ IN CON TEXT WITH THE PURCHASE AND INTENTION FOR WHICH THE AMENDMENT WAS MADE U/S 115WB(1)(C) LEAVES NO SCOPE OF DEBATE THAT THE SAID AMENDMENT WAS TO REMEDY THE UNINTENDED CONSEQUENCES AND THEREFORE,, IT IS REQUIRED TO BE CONSIDERED AS RETR OSPECTIVE IN OPERATION SO THAT A REASONABLE INTERPRETATION CAN B E GIVEN TO THE SCHEME OF LEVY OF FRINGE BENEFIT TAX ON CONTRIB UTION TO 9 SUPERANNUATION FUND AS A WHOLE. WE, THEREFORE, HOL D THAT THE CONTRIBUTION TO SUPERANNUATION FUND IN PRESENT CASE BEING LESS THAN RS. 1.00 LAC PER EMPLOYEE, IS NOT LIABLE FOR F RINGE BENEFIT TAX. IN THE RESULT, THIS GROUND OF ASSESSEE IS ALL OWED. 4. THE ABOVE REFERRED DECISION HAS BEEN FOLLOWED IN THE FOLLOWING ORDER:- RAJASTHAN RAJYA VIDYUT UTPADAN NIGAM LTD., I.T.A. N O. 730/JP/20/2009 ORDER DATED 26.2.2010 SINCE THE ISSUE BEFORE US STANDS COVERED BY THE DEC ISION OF THE TRIBUNAL AND HENCE FOLLOWING THE DECISION OF THE T RIBUNAL, WE HOLD THAT THE LD. CIT(A) WAS JUSTIFIED IN HOLDING THAT T HE ADDITION BY TREATING THE CONTRIBUTION MADE TO SBBJ EMPLOYEES PE NSION FUND AS NOT LIABLE TO FBT AS AMENDMENT MADE IN SECTION 115W C(1)(B) IS RETROSPECTIVE AND APPLICABLE TO THE ASSESSMENT YEAR 2006-07. 13. BEFORE US, REVENUE HAS NOT PLACED ANY CONTRARY BINDI NG DECISION IN ITS SUPPORT. WE THEREFORE, FOLLOWING THE DECISION O F JAIPUR BENCH OF THE TRIBUNAL, HOLD THAT THE AMENDMENT T O SEC.115WB(1)(C) IS RETROSPECTIVE AND IS APPLICABLE TO THE YEAR UNDER CONSIDERATION. THUS THIS PART OF THE GROUND IS DECIDED IN FAVOUR OF THE ASSESSEE. 14. WITH RESPECT TO CONVEYANCE EXPENSES OF RS.34,000/-, IT IS ASSESSEES SUBMISSION THAT THE AMOUNT OF CONVEYANCE EX PENSES HAS BEEN PAID FOR THE NON-EXECUTIVE DIRECTORS AND CONSULTANT S, WHO WERE NOT THE EMPLOYEES OF THE ASSESSEE. THE AFORESAID CONTEN TION OF ASSESSEE HAS NOT BEEN CONTROVERTED BY REVENUE. WE FIN D THAT THE CO-ORDINATE BENCH OF THE TRIBUNAL OF AHMEDABAD BENCH IN THE CASE OF JOSHI TECHNOLOGY INTERNATIONAL INCORPORATION (SUPRA) HA S HELD THAT FBT IS ALLOWABLE ONLY IN A CASE WHERE EXPENDITURE IS INCURRED BY THE EMPLOYER OSTENSIBLY FOR THE PURPOSE OF BUSINESS BUT INCLUDES PARTIALLY A BENEFIT OF A PERSONAL NATURE PASSED ON TO THE EMPLOYEES. IT FURTHER HELD THAT LEGITIMATE BUSINESS EXPENDITURE NOT W ITHIN THE 10 AMBIT OF EMPLOYER - EMPLOYEE RELATIONSHIP IS OUTSIDE THE SC OPE OF FBT. BEFORE US, REVENUE HAS NOT PLACED ANY CONTRARY BINDING DECISION IN ITS SUPPORT. WE THEREFORE HOLD THAT THE CONVE YANCE EXPENSES INCURRED ON NON EMPLOYEES IS NOT LIABLE FOR FBT. THUS, THIS PORTION OF THE GROUND IS DECIDED IN ASSESSEES FAVOUR. 15. IN THE RESULT, THE APPEAL OF ASSESSEE IS PARTLY ALL OWED. ORDER PRONOUNCED ON 31 ST DAY OF JANUARY, 2018. SD/- SD/- ( VIKAS AWASTHY ) ( ANIL CHATURVEDI ) ! / JUDICIAL MEMBER '! / ACCOUNTANT MEMBER PUNE; DATED : 31 ST JANUARY, 2018. YAMINI #$%&'('% / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5 6. CIT(A), PUNE-5, PUNE. PR.CIT, PUNE-4, PUNE. '#$ %%&',) &', / DR, ITAT, A PUNE; $,-./ GUARD FILE. / BY ORDER // TRUE COPY // / / // TRUE COPY // /01%2&3 / SR. PRIVATE SECRETARY ) &', / ITAT, PUNE.