M/s Dredging Corporation Of India Ltd., Visakhapatnam V. THE Addl.CIT, Visakhapatnam

ITA 571/VIZ/2013

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 6595 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 4 year(s) 2 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-10-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 14-08-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R GOVINDARAJAN
• Section: 2

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . . , BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH , ACCOUNTANT MEMBER . / I . T .A.NO. 5 71 /VIZ/ 201 3 ( / ASSESSMENT YEAR: 20 09 - 1 0 ) M/S DREDGING C ORPORATION OF INDIA LTD. [PAN :AACD6021B] VS. ACIT, RANGE - 3, VISAKHAPATNAM ( / APPELLANT) ( / RESPONDENT) / REVENUE BY : SHRI R. GOVINDARAJAN, DR / ASSESSEE BY : SHRI G.V.N. HARI , AR / DATE OF HEARING : 12 . 10 .2017 / DATE OF PRONOUNCEMENT : 25 .10 .2017 / O R D E R PER BENCH : 1. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX ( APPEALS ) [CIT (A)] , VISAKHAPATNAM VIDE ITA NO. 34 5 /1 1 - 12 / ADDL.CIT, R - 3 / VSP /201 3 - 1 4 DATED 27 .0 6 .201 3 FOR THE ASSESSMENT YEAR 20 09 - 1 0 . 2 ITA NO S . 5 71 /VIZ/2013 M/S DREDGING CORPORATION OF INDIA LTD., VISAKHAPATNAM 2. ALL THE GROUNDS OF APPEAL ARE RELATED TO THE FRINGE BENEFIT TAX. THE ASSESSEE HAD INCURRED A SUM OF RS.1,25,28,394/ - ON HOTEL, BOARDING AND LODGING FACILITIES BUT NOT OFFERED FOR THE PURPOSE OF FRINGE BENEFIT TAX AS PER SECTION 115W B (2) G OF THE I.T. ACT. THE ASSESSING OFFICER TAXED THE ABOVE PAYMENT @20% AND ADDED BACK TO THE VALUE OF FRINGE BENEFITS. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE W ENT ON APPEAL BEFORE THE CIT (A) AND THE LD. CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER IN TAXING THE VALUE @ 20% AS UNDER : I HAVE CONSIDERED THE SUBMISSIONS MADE. IN VIEW OF SUB - CLAUSE G TO SECTION 115WB(2), HOTEL, BOARDING AND LODGING FACILI TIES FALL WITHIN THE PURVIEW OF FRINGE BENEFIT AND ARE LIABLE TO FRINGE BENEFIT TAX. IT WAS CONTENDED THAT SUB - CLAUSE(AB) TO SECTION 115WC(2) PROVIDES THAT IN THE CASE OF AN EMPLOYER ENGAGED IN THE BUSINESS OF CARRIAGE OF PASSENGERS OR GOODS BY SHIP, THE VALUE OF FRINGE BENEFIT SHALL BE 5% INSTEAD OF 20%. I HAVE CONSIDERED THE PLEA. THE APPELLANT IS ENGAGED IN THE BUSINESS OF DREDGING ACTIVITIES AND NOT IN THE BUSINESS OF CARRIAGE OF PASSENGERS OR GOODS BY SHIP. HENCE, THE VALUE OF FRINGE BENEFIT HAS TO BE DETERMINED AT 20% AND NOT AT 5% AS CONTENDED. AS A RESULT, THE AOS ACTION IS CONFIRMED. THIS GROUND OF APPEAL IS DISMISSED. 3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED ON RECORD. THE ASSESSEE IS NOT ENGAGED IN CARRIAGE OF PASSENGERS OR GOODS. HENCE, THE VALUE OF FRINGE BENEFIT IS 20%. T HE CIT(A) HAS RIGHTLY APPLIED THE PROVISION OF 115W B (2) G, HENCE W E DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) AND THE SAME IS UPHELD. 4. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. 3 ITA NO S . 5 71 /VIZ/2013 M/S DREDGING CORPORATION OF INDIA LTD., VISAKHAPATNAM T HE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 25 TH OCT 20 17 . SD/ - SD/ - ( . ) ( . . ) (V. DURGA RAO) ( D.S. SUNDER SINGH ) /JUDICIAL MEMBER /ACCOUNTANT MEMBER /VISAKHAPATNAM /DATED : 25 . 10 .2017 L. RAMA, SPS / COPY OF THE ORDER FORWARDED TO: - 1. / THE APPELLANT S M/S DREDGING C ORPORATION OF INDIA LTD., DREDGE HOUSE, PORT AREA, VISAKHAPATNAM 2 . / THE RESPONDENT ACIT, RANGE - 3, VISAKHAPATNAM 3 . THE COMMISSIONER OF INCOME TAX - 1, VISAKHAPATNAM 4. THE COMMISSIONER OF INCOME TAX (APPEALS) - VISAKHAPATNAM 5 . , , / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM