UTI SECURITIES LTD ( NOW KNOWN AS STANDAR CHARTERED STCI CAPITAL MARKETS LTD), MUMBAI V. ADDL CIT RG 4(2), MUMBAI

ITA 5129/MUM/2010

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9539 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Next Hearing Date: 24-09-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 21-06-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Gift

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI F BENCH MUMBAI BENCHES, MUMBAI BEFORE SHRI RAJENDRA SINGH , AM & SHRI VIJAY PAL RAO, JM ITA NO. 5129/MUM/2010 (ASST YEAR 2006-07 UTI SECURITIES LTD (NOW KNOWN AS STANDARD CHARTERED-STCI CAPITAL MARKETS LTD) DHEERAJ ARMA, 1 ST FLOOR ANANT KANEKAR MARG BANDRA (E) MUMBAI 51 VS THE ADDL COMMR OF INCOME TAX RANGE 4(2), MUMBAI (APPELLANT) (RESPONDENT) PAN NO. AAACU0622M ASSESSEE BY SHRI NITESH JOSHI REVENUE BY SH MANOJ KUMAR DT.OF HEARING 27 TH NOV 2012 DT OF PRONOUNCEMENT 30 TH , NOV 2012 ORDER PER VIJAY PAL RAO, JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 12.4.2010 OF THE COMMISSIONER OF INCOME TAX(APPEALS) FOR THE AS SESSMENT YEAR 2006-07. 2 THE ASSESSEE HAS RAISED THE FOLLOWING GROUND IN T HIS APPEAL: ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE COMMISSIONER OF INCOME TAX(APPEALS) HAS CONFIRMED THE ADDITIONS MADE BY THE ASSESSING OFFICER OF RS,. 29,16,854/- ON ACCOUNT OF PAYMENTS MADE TO SODEXHO MEAL VOUCHERS FOR THE PURPOSE OF FRINGE BENEFITS ON THE REA SONING THAT THEY ARE TRANSFERABLE AND CAN BE EXCHANGED AT ALL EATABLE/FO OD JOINTS AND OUTLETS. 2.1 THE ASSESSEE FILED ITS RETURN OF INCOME ALONG WITH FRINGE BENEFITS OF ` 63,96,794/- DECLARING TOTAL INCOME OF ` 15,15,27,579/- ON 30.11.2006. THE RETURN WAS PROCESSED U/S 115WE OF THE IT ACT AND SUBSEQUENTLY THE CASE WAS SELECTED FOR SCRUTINY BY ISSUING NOTICE U/S 115WE(2) OF THE ACT. THE ASSESSING OFFICER NOTED THAT DURING THE YEAR THE ASSESSEE PAID ` 29,16,854/- TO ITS EMPLOYEES ON ACCOUNT OF ITA NO 5129/MUM/2010 UTI SECURITIES . 2 MEAL VOUCHERS/SODEXHO COUPONS. THE ASSESSING OFFIC ER WAS OF THE VIEW THAT THESE COUPONS CAN BE UTILIZED BY THE EMPLOYEES BOTH FOR P URCHASE OF GROCERIES AND OTHER HOUSEHOLD ITEMS AND SECONDLY SINCE THESE COUPONS AR E NOT ISSUED BY NAME; THEREFORE, THEY ARE FREELY TRANSFERABLE. THEY CAN BE USED AS DIWALI GIFTS AND OTHER THINGS. SINCE THESE VOUCHERS ARE BOTH TRANSFERABLE AND CAN BE USED TO PURCHASE ITEMS OTHER THAN EATABLES AS PER GENERAL PRACTICE, THESE FALLS OUTSIDE THE PURVIEW OF EXEMPTION ALLOWED U/S 115WB(II). ACCORDINGLY, THE ASSESSING OFFICER TREATED ` 29,16,854/- AS VALUE OF FRINGE BENEFITS(SBT). 2.2 ON APPEAL, THE COMMISSIONER OF INCOME TAX (APPE ALS) THE COMMISSIONER OF INCOME TAX(APPEALS) HAS CONFIRMED THE ACTION OF THE ASSESSING OFFICER ON SIMILAR REASONING THAT THE VOUCHERS/COUPONS ARE NOT EXACTLY FOOD VOUCHERS AND CAN BE USED AT DEPARTMENTAL STORES LIKE APNA BAZAR, BIG BAZAR ETC., AND NOT EATING JOINTS. 3 BEFORE US, THE LD AR HAS SUBMITTED THAT AS PER TH E TERMS AND CONDITIONS OF THE MEAL COUPONS, THE SAME ARE NOT TRANSFERABLE AND CAN BE USED ONLY FOR READY TO EAT FOOD ITEMS AND NON-ALCOHOLIC BEVERAGES AT EATING PO INTS OR OUTLETS AFFILIATED TO SODEXHO. THUS, THE LD AR HAS SUBMITTED THAT WHEN AS PER THE TERMS AND CONDITIONS OF THE COUPON, THE SAME ARE NON-TRANSFERABLE AND CANNO T BE USED OTHER THAN EATING ITEMS/FOOD ITEMS. HE HAS FURTHER SUBMITTED THAT TH E ASSESSING OFFICER HAS PROCEEDED ON THE WRONG FACTS. THE LD AR HAS FILED A SAMPLE C OPY OF THE COUPON ALONG WITH TERMS AND CONDITIONS IN SUPPORT OF HIS CONTENTION. HE HAS REFERRED SECTION 115WB AND SUBMITTED THAT AS PER SUB. SEC. 2(B)(II) ANY EX PENDITURE ON OR PAYMENT THROUGH PAID VOUCHERS WHICH ARE NOT TRANSFERABLE AND USABLE ONLY AT EATING JOINTS OR OUTLETS FALL WITHIN THE EXEMPTION OF DEEMED FRINGE BENEFI T. THUS, THE LD AR HAS SUBMITTED THAT AS PER THE TERMS AND CONDITIONS OF THE VOUCHER S, THE SAME CANNOT BE TREATED ITA NO 5129/MUM/2010 UTI SECURITIES . 3 AS DEEMED FRINGE BENEFIT AND THE ACTION OF CHARGING TO TAX, THE SAME IS NOT WARRANTED. 3.1 ON THE OTHER HAND, THE LD DR HAS SUBMITTED THAT THE ASSESSING OFFICER AS WELL AS THE COMMISSIONER OF INCOME TAX(APPEALS) HAVE GIV EN A FINDING THAT THESE VOUCHERS WERE TRANSFERABLE AND ALSO CAN BE USED FOR PURCHASE OF OTHER THAN FOOD ITEMS AT VARIOUS PLACES LIKE APNA BAZAR, BIG BAZA R ETC. THEREFORE, THE COUPONS IN QUESTION DO NOT QUALIFY FOR THE EXEMPTION. HE HAS R ELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 4 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS THE RELEVANT MATERIAL ON RECORD. AS PER THE TERMS AND CONDITIONS AS STIPULAT ED FOR USE OF THE COUPONS, THE SAME ARE MEAL VOUCHERS AND ARE NOT TRANSFERABLE. T HE RELEVANT PART OF THE TERMS AND CONDITIONS ARE REPRODUCED HERE UNDER: USER: THIS MEAL VOUCHER IS NON TRANSFERABLE. VALID ONLY FOR READY TO EAT ITEMS, FOOD AND NON-ALCOHOLIC BEVERAGES AT EATING POINTS O R OUTLETS AFFILIATED TO SODEXO. NO CHANGE OR CASH CAN BE TAKEN IN EXCHANGE O F THIS VOUCHER. AFFILIATE; THIS VOUCHER CAN BE TAKEN ONLY A PAYMENT FOR READY TO EAT ITEMS, FOOD AND NON ALCOHOLIC BEVERAGES. NO CHANGE OR CASH C AN BE GIVEN IN LIEU OF THIS VOUCHER. THIS VOUCHER CAN BE REIMBURSED IN ACCORDANCE WITH COMPANYS TERMS AND CONDITIONS TILL 31 ST JAN 2011. ON RECEIPT, MARK EACH VOUCHER WITH YOUR AFFILIATE CODE STAMP. 4.1 AS IT IS CLEAR FROM THE TERMS AND CONDITIONS RE PRODUCED ABOVE, THE VOUCHERS ARE NOT TRANSFERABLE. FURTHER, THE VALIDITY IS ON LY FOR READY TO EAT ITEMS FOOD, NON- ALCOHOLIC BEVERAGES AT EATING POINTS AND OUTLETS AF FILIATED TO SODEXHO. THESE VOUCHERS, AS PER THE TERMS AND CONDITIONS ARE ALSO NOT EXCHANGEABLE TO CASH. THE ASSESSING OFFICER HAS OBSERVED IN THE ASSESSMENT OR DER THAT THESE COUPONS ARE FREELY TRANSFERABLE AND CAN BE USED AS DIWALI GIFTS AND OT HER THINGS FOR PURCHASE OF GARMENTS AND OTHER ITEMS; BUT IT IS NOT CLEAR ON WH AT BASIS IT HAS BEEN OBSERVED. ITA NO 5129/MUM/2010 UTI SECURITIES . 4 THOUGH THE LD AR HAS SUBMITTED THAT COPY OF THE C OUPON AND TERMS AND CONDITIONS WERE FURNISHED BEFORE THE ASSESSING OFFICER. HOWEVE R, IT APPEARS THAT THE AUTHORITIES BELOW HAVE NOT EXAMINED AND CONSIDERED THE TERMS AN D CONDITIONS AS STIPULATED AND FILED BEFORE US. ACCORDINGLY, IN THE INTEREST OF JUSTICE, WE SET ASIDE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS) AND REMIT THE ISSUE TO THE RECORD OF THE ASSESSING OFFICER FOR DECIDING THE SAME AFRESH AFT ER CONSIDERING THE TERMS AND CONDITIONS AS RELIED UPON BY THE ASSESSEE. 5 IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE I S ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 30 TH , DAY OF NOV 2012. SD/- SD/- ( RAJENDRA SINGH ) ACCOUNTANT MEMBER ( VIJAY PAL RAO ) JUDICIAL MEMBER PLACE: MUMBAI : DATED: 30 TH , NOV 2012 RAJ* COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR, ITAT, MUMBAI