ADIT, Dehradun V. M/s. Halliburton Energy Services Ltd., Mumbai

ITA 4984/DEL/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58470 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-01-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 11-01-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 09-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Salary income

Judgement Text

ITA NOS. 4984 & 4985/DEL/2011 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C NEW DELHI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 4984/DEL/2011 A.Y. : 2008-09 ASSTT. DIRECTOR OF INCOME TAX (INTL. TAXATION), 13-A, SUBHASH ROAD, AAYAKAR BHAVAN, DEHRADUN VS. M/S HALLIBURTON ENERGY SERVICES LTD., A/A OF MR. GODANTI SRIDHAR, A-18, MIDI ESTATE, CROSS ROAD B, ANDHERI (EAST) MUMBAI 400 093 (PAN/GIR NO. : ANQPG8979B) AND ITA NO. 4985/DEL/2011 A.Y. : 2008-09 ASSTT. DIRECTOR OF INCOME TAX (INTL. TAXATION), 13-A, SUBHASH ROAD, AAYAKAR BHAVAN, DEHRADUN VS. M/S HALLIBURTON ENERGY SERVICES LTD., A/A OF MR. ASHISH MEHTA, A-18, MIDI ESTATE, CROSS ROAD B, ANDHERI (EAST), MUMBAI 400 093 (PAN/GIR NO. : ANQPG8979B) (APPELLANT ) (APPELLANT ) (APPELLANT ) (APPELLANT ) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) ASSEESSEE BY : SH. AMIT ARORA, CA DEPARTMENT BY : SH. ASHWANI KUMAR MAHAJAN, C.I.T.(D.R.) ORDER ORDER ORDER ORDER PER PER PER PER BENCH BENCH BENCH BENCH THESE TWO APPEALS FILED BY THE REVENUE ARE DIRECTE D AGAINST THE RESPECTIVE ORDERS OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-II, DEHRADUN PERTAINING TO ASSESSMENT YEAR 2008-09. ITA NOS. 4984 & 4985/DEL/2011 2 2. THE GROUNDS RAISED IN ITA NO. 4984/DEL/2011 READ AS UNDER:- I) ON FACTS AND CIRCUMSTANCES OF THE CASE, WHETHER IN THE CASE OF EMPLOYEE RECEIVING A TAX FREE SALARY, AS PER AGREEMENT, THE TAXES PAID BY EMPLOYER CONSTITUTED A MONETARY CONSTITUTED A MONETARY PAYMENT THAT WAS PART AND PARCEL OF SALARY. II) ON FACTS AND CIRCUMSTANCES OF THE CASE, WHETH ER IN THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAD ERRED IN ALLOWING EXEMPTION U/S. 10(10CC), WHERE THE FACTS C LEARLY ESTABLISH THAT THE TAX PAID BY THE COMPANY M/S HALLIB URTON ENERGY SERVICES LTD. FOR A.Y. 2008-09 WAS PART AND PARCEL SALARY OF MR. GODANTI SRIDHAR AND MR. ASHISH MEHTA A ND THEREFORE, THIS PAYMENT ON BEHALF OF THE ASSESSEE CONSTITUTED A MONETARY PAYMENT FALLING OUTSIDE THE P URVIEW OF SECTION 10(10CC) OF THE INCOME TAX ACT. III) ON FACTS AND CIRCUMSTANCES OF THE CASE, WHETHER IN THE LD. LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED I N FOLLOW THE DECISION OF SPECIAL BENCH OF ITAT, WHICH IS PERVERSE AND DISREGARDED THE CLEAR CUT PROVISION OF SECTION 17(2) READ WITH SECTION 10(10CC) AND CORROBORATED B Y SECTION 195A R.W.S. 198 OF THE IT ACT, 1961 AND AGA INST WHICH DEPARTMENT IS IN APPEAL BEFORE THE HONBLE HI GH COURT OF UTTARAKHAND. IV) THE APPELLANT PRAYS FOR LEAVE TO ADD, AMEND, MOD IFY OR ALTER ANY GROUNDS OF APPEAL AT THE TIME OF BEFORE THE HEA RING OF THE APPEAL. ITA NOS. 4984 & 4985/DEL/2011 3 3. THE GROUNDS RAISED IN ITA NO. 4985/DEL/2011 READ AS UNDER:- I) ON FACTS AND CIRCUMSTANCES OF THE CASE, WHETHE R IN THE CASE OF EMPLOYEE RECEIVING A TAX FREE SALARY, AS PER AGREEMENT, THE TAXES PAID BY EMPLOYER CONSTITUTED A MONETARY CONSTITUTED A MONETARY PAYMENT THAT WAS PART AND PARCEL OF SALARY. II) ON FACTS AND CIRCUMSTANCES OF THE CASE, WHETH ER IN THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAD ERRED IN ALLOWING EXEMPTION U/S. 10(10CC), WHERE THE FACTS C LEARLY ESTABLISH THAT THE TAX PAID BY THE COMPANY M/S HALLIB URTON ENERGY SERVICES LTD. FOR A.Y. 2008-09 WAS PART AND PARCEL SALARY OF MR. GODANTI SRIDHAR AND MR. ASHISH MEHTA A ND THEREFORE, THIS PAYMENT ON BEHALF OF THE ASSESSEE CONSTITUTED A MONETARY PAYMENT FALLING OUTSIDE THE P URVIEW OF SECTION 10(10CC) OF THE INCOME TAX ACT. III) ON FACTS AND CIRCUMSTANCES OF THE CASE, WHETHER IN THE LD. LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED I N FOLLOW THE DECISION OF SPECIAL BENCH OF ITAT, WHICH IS PERVERSE AND DISREGARDED THE CLEAR CUT PROVISION OF SECTION 17(2) READ WITH SECTION 10(10CC) AND CORROBORATED B Y SECTION 195A R.W.S. 198 OF THE IT ACT, 1961 AND AGA INST WHICH DEPARTMENT IS IN APPEAL BEFORE THE HONBLE HI GH COURT OF UTTARAKHAND. IV) THE APPELLANT PRAYS FOR LEAVE TO ADD, AMEND, MOD IFY OR ALTER ANY GROUNDS OF APPEAL AT THE TIME OF BEFORE THE HEA RING OF THE APPEAL. ITA NOS. 4984 & 4985/DEL/2011 4 4. THE AFORESAID GROUNDS OF APPEAL REVOLVE AROUND T HE CONTROVERSY AS TO WHETHER THE TAX PAID BY THE EMPLOYER ON BEHALF OF THE EMPLOYEE IS A PERQUISITE NOT PROVIDED BY WAY OF MONETARY PAY MENT FOR THE PURPOSE OF ALLOWING EXEMPTION U/S. 10(10CC) OF THE ACT. IN ALL THESE CASES, THE ASSESSEES HAVE CLAIMED IN THE RETURN OF I NCOME THAT THE TAX PAID BY THE EMPLOYER ON BEHALF OF THE ASSESSEES EMPL OYEES IS A PERQUISITE NOT PROVIDED BY WAY OF MONETARY PAYMENT, AND AS SUCH THEY ARE NOT TO BE INCLUDED INTO THE SALARY INCOME CHARG EABLE TO TAX UNDER THE INCOME TAX ACT INASMUCH AS PER PROVISIONS OF SEC TION 10(10CC) OF THE ACT, THE PERQUISITE NOT PROVIDED BY WAY OF MONET ARY PAYMENT ARE EXEMPTED FROM TAX. HOWEVER, THE ASSESSING OFFICER H AS NOT ACCEPTED THE ASSESSEES CONTENTION AND HOLD THAT THE TAX PA ID FOR AND BEHALF OF THE EMPLOYEE IS A PERQUISITE, WHICH IS TO BE ADDE D TO THE INCOME OF THE ASSESSEE ON MULTIPLE STAGE GROSSING UP. 5. BEING AGGRIEVED THE ASSESSEE PREFERRED AN APPE AL BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS). LD. COMMISS IONER OF INCOME TAX (APPEALS) CONSIDERED THE ISSUE AND REFER RED TO THE DECISION OF THE ITAT, SPECIAL BENCH, NEW DELHI IN THE CASE OF RBF RIG CORPORATION, LLC VS. ACIT REPORTED IN 109 ITD 141 (D EL) (SB). THE LD. COMMISSIONER OF INCOME TAX (APPEALS) REPRODUCED THE HEAD NOTES AS UNDER:- SECTION 10(10CC) OF THE INCOME TAX ACT, 1961 PERQ UISITE, NOT PROVIDED BY MONETARY PAYMENT ASSESSMENT YEAR 2004-05 WHETHER PAYMENT OF TAX ON BEHALF OF EMPLO YEE AT OPTION OF EMPLOYER IS A NON-MONETARY PERQUISITE F ULLY COVERED BY SUB-CLAUSE (IV) OF CLAUSE (2) OF SECTION 17 AND, THUS, EXEMPT UNDER SECTION 10(10CC) AND IS NOT LIABL E TO BE ITA NOS. 4984 & 4985/DEL/2011 5 INCLUDED IN TOTAL INCOME OF EMPLOYEE HELD, YES W HETHER TAXES PAID BY EMPLOYER CAN BE ADDED ONLY ONCE IN SA LARY OF EMPLOYEE AND THEREAFTER, TAX ON SUCH PERQUISITE IS N OT TO BE ADDED AGAIN HELD, YES. 6. CONSIDERING THE ABOVE, LD. COMMISSIONER OF INCOME TAX (APPEALS) GRANTED THE RELIEF TO THE ASSESSEE. 7. LD. DEPARTMENTAL REPRESENTATIVE AFTER NARRATING T HE FACTS RELIED UPON THE ASSESSMENT ORDER AND REFERRING THE GROUNDS OF APPEAL HE SUBMITTED THAT THE DECISION OF THE SPECIAL BENCH HAS BEEN AGITATED BY THE DEPARTMENT IN AN APPEAL FILED BEFORE THE UTT RAKHAND HIGH COURT. THEREFORE, RELYING UPON THE ASSESSMENT OR DER, HE PLEADED THAT THE RELIEF HAS WRONGLY BEEN GIVEN BY THE LD. COMMISSI ONER OF INCOME TAX (APPEALS) TO THE ASSESSEE AND HIS ORDER SHOULD BE SET ASIDE AND THAT OF ASSESSING OFFICER BE RESTORED. 8. ON THE OTHER HAND, RELYING UPON THE ORDER OF TH E LD. COMMISSIONER OF INCOME TAX (APPEALS) AND AFOREMENTION ED DECISION OF THE SPECIAL BENCH, ITAT, IT IS THE CASE OF TH E AUTHORISED REPRESENTATIVE THAT LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS RIGHTLY GRANTED THE RELIEF AND THEREFORE, THE APPE ALS FILED BY THE REVENUE SHOULD BE DISMISSED. 9. WE HAVE HEARD BOTH THE PARTIES AND THEIR CONTENT IONS HAVE BEEN CAREFULLY CONSIDERED. THE AFOREMENTIONED DECISION OF THE SPECIAL BENCH, ITAT IS SQUARELY APPLICABLE TO THE PRESENT APPEALS. ACCORDINGLY, RESPECTFULLY FOLLOWING THE PRECEDENT, WE UPHOLD THE ORDER ITA NOS. 4984 & 4985/DEL/2011 6 OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) AND DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE. 10. IN THE RESULT, BOTH THE APPEALS FILED BY THE REVENUE STAND DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 11/1/2012 UPO N CONCLUSION OF HEARING. SD/- SD/- [ [[ [I.P. BANSAL I.P. BANSAL I.P. BANSAL I.P. BANSAL] ]] ] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 11/1/2012 SRB COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES