ADIT, Dehradun V. Transocean Offshore International Ventures Ltd. As agent of Mr. Robin Terry J, Mumbai

ITA 6068/DEL/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1239 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-02-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Assessment Year: 2009-2010
• Appeal Filed On: 06-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAMEER SHARMA
• Section: 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH H NEW DELHI) BEFORE SHRI A.D. JAIN, JUDICIAL MEMBER AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A. NO.6068.6069 & 6070/DEL/2012 ASSESSMENT YEAR : 2009-10 ADIT, TRANSOCEAN OFFSHORE INT. INTERNATIONAL TAXATION, CENTURE LTD. AS AGENT OF 13A-SUBASH ROAD, MR. ROBIN TORRY J, DEHRADUN. V. MR. NEILSEN EGON & MR. FLYNN TONY R, BOMBAY. (APPELLANT) (RESPONDENT) PAN /GIR/NO. PAN /GIR/NO. PAN /GIR/NO. PAN /GIR/NO.AABCT AABCT AABCT AABCT- -- -7361 7361 7361 7361- -- -B & 1672 B & 1672 B & 1672 B & 1672- -- -C CC C APPELLANT BY : SHRI SAMEER SHARMA, SR. DR. RESPONDENT BY : SHRI AMIT ARORA, C.A. ORDER PER BENCH: THESE THREE APPEALS ARE FILED BY THE REVENUE AGAINST T HREE SEPARATE ORDERS OF LD CIT(A) ALL DATED 21.9.2012. THE GROUND S OF APPEALS TAKEN BY THE REVENUE ARE SAME IN RESPECT OF ALL THESE THREE APPEALS. THE ASSESSEE HAS BEEN ASSESSED AS AN AUTHORIZED AGENTS U/S 163 OF THE INCOME TAX ACT, 1961 IN RESPECT OF MR. ROBIN TORRY J , MR. NEILSEN EGON & MR. FLYNN TONY R RESPECTIVELY WHO ARE FOREIGN NATI ONALS EMPLOYED BY THE ASSESSEE. THE APPEALS RELATE TO INCOME TAX PAID BY A SSESSEE ON BEHALF OF ASSESSEE FOR WHICH ASSESSEE HAD CLAIMED DEDUCTIO N U/S 10(10CC) OF THE INCOME TAX ACT, 1961 AND FOR WHICH ASSESSING OFFICER DID NOT AGREE. THE GROUNDS OF APPEAL IN RESPECT OF FI RST PERSON ARE AS UNDER:- ITA NO.6068,6069 & 6070/DEL/12 2 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE CIT(A) HAS ERRED IN HOLDING THAT THE TAX PAID BY THE EMPLOYER ON THE SALARY/REMUNERATION OF THE EMPLOYEE, ALTHOUGH A MONETARY PERQUISITE IS COVERED UNDER SECTION 17(2) OF THE IT AC T SINCE IT IS PAID ON HIS ACCOUNT TO THE INCOME TAX DEPARTMENT. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE CIT(A) HAS ERRED IN HOLDING THAT THE TAX PAID BY THE EMPLOYER ON THE SALARY/REMUNERATION OF THE EMPLOYEE, ALTHOUGH A MONETARY PERQUISITE IS ELIGIBLE FOR EXEMPTION U/S 10 (10CC) OF THE INCOME TAX ACT, 1961 EVEN WHEN THE SECTION COVERS PERQUISITE NOT PROVIDED FOR BY WAY OF MONETARY PAYMENT ONLY. 3. THE APPELLANT PRAYS FOR LEAVE TO ADD AMEND MODIFY O R ALTER ANY GROUNDS OF APPEAL AT THE TIME OF BEFORE HEARING OF T HE APPEAL. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILE D RETURN OF INCOME OF THE ABOVE PERSONS AS AN AUTHORIZED AGENT U/S 163 REPORTING TAXABLE INCOME UNDER THE HEAD SALARY AND IN THE RETU RN OF INCOME FILED BY THE APPLICANT EXEMPTION U/S 10(10CC) OF THE INCOM E TAX ACT, 1961 WAS CLAIMED IN RESPECT OF TAXES ON PERQUISITE NOT PROV IDED BY WAY OF MONETARY PAYMENT WITHIN THE MEANING OF SECTION 17(2) OF THE ACT. AS PER SECTION 10(10CC) OF THE ACT THE TAX PAID BY AN EMPLOYER IS EXEMPT IN THE HANDS OF EMPLOYEE IF THE FOLLOWING CONDITIONS WERE SATISFIED:- A) THE TAX PAYMENT IS IN RESPECT OF AN INDIVIDUAL; B) THE INDIVIDUAL IS AN EMPLOYEE OF THE PAYER AND C) THE TAX IS PAID IN RESPECT OF PERQUISITE NOT PROVIDED FOR BY WAY OF A MONETARY PAYMENT WITHIN THE SECTION OF 17(2 ) OF THE ACT. ITA NO.6068,6069 & 6070/DEL/12 3 3. DURING ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER EX AMINED THE PROVISIONS OF SECTION 10(10CC) ALONG WITH PROVISIO NS OF SECTION 17(2) OF THE ACT AND ALSO EXAMINED THE CASE LAW DECID ED BY SPECIAL BENCH OF DELHI TRIBUNAL IN THE CASE OF RBF RIGS CORPO RATION LIC V. ACIT, DEHRADUN WHEREIN IT WAS HELD THAT PAYMENT OF TAX PAI D ON BEHALF OF AN EMPLOYEE AT THE OPTION OF AN EMPLOYER IS A NON MONET ARY PERQUISITE FULLY COVERED BY SECTION 17(2) (IV) OF THE ACT AND T HUS WAS EXEMPT U/S 10(10CC) OF THE ACT AND WAS NOT LIABLE TO BE INCLUDE D IN THE TOTAL INCOME OF AN EMPLOYEE. IT WAS FURTHER HELD IN THIS CA SE THAT TAXES PAID BY EMPLOYER CAN BE ADDED ONLY ONCE IN THE SALARY OF AN EMPLOYEE AND THEREFORE THE TAX ON SUCH PERQUISITE CANNOT BE ADDED AGAIN. THE ASSESSING OFFICER FURTHER HELD THAT TAX PERQUISITE AGAIN ST WHICH EXEMPTION WAS CLAIMED WAS NOT ELIGIBLE FOR EXEMPTION UNDER THE PROVISIONS OF SECTION 10(10CC) OF THE ACT AND THEREFOR E THE VALUE OF TAX PERQUISITE WAS ADDED TO THE INCOME OF ASSESSEE. 4. AGGRIEVED BY THE ORDER, THE ASSESSEE CARRIED THE MAT TER TO LD CIT(A) AND LD CIT(A) AFTER GOING THROUGH THE SUBMISSI ONS FILED BY THE ASSESSEE ALLOWED THE APPEALS OF ASSESSEE IN VIEW OF SPECIAL BENCH ORDER IN THE CASE OF RBF RIGS CORPORATION LIC REPORTE D AT 113 TTJ 143 (SB). 5. AGGRIEVED THE REVENUE FILED APPEALS BEFORE THIS TR IBUNAL. 6. AT THE OUTSET, THE LD DR STATED THAT GOVT. WILL LO SE ABOUT 10% OF TAXES COLLECTED UNDER THE HEAD SALARIES IF THE INTENTI ON OF LEGISLATURE WAS TO EXEMPT TAX ON TAXES PAID BY THE EMPLOYER ON BE HALF OF ASSESSEE. HE FURTHER CONTENDED THAT EMPLOYER WOULD JUST CHANGE TERMS OF CONTRACT IN SUCH A WAY THAT INTEREST OF REVEN UE IS HURT WITHOUT ITA NO.6068,6069 & 6070/DEL/12 4 CAUSING ANY HARDSHIP TO ASSESSEE AND EMPLOYER. THEREFORE, HE ARGUED THAT LD ASSESSING OFFICER HAD RIGHTLY MADE THE ADDITION S. 7. THE LD AR, ON THE OTHER HAND, SUBMITTED THAT THE APPEALS ARE COVERED IN FAVOUR OF ASSESSEE BY THE ORDER OF HON'BLE H IGH COURT OF UTTRAKHAND AND INVITED OUR ATTENTION TO PAGE 5 OF H IGH COURT ORDER. IN VIEW OF THE ABOVE, HE ARGUED THAT APPEALS OF THE REV ENUE BE DISMISSED AS THE MATTERS ARE COVERED IN FAVOUR OF THE ASSESSEE. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS OF BOTH THE PAR TIES AND HAVE GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE APPEALS OF REVENUE ARE COVERED AGAINST IT AND ARE IN FAVOUR OF ASSESSEE. IN VIEW OF THE HON'BLE UTTRAKHAND HIGH COURT JUDGMENT IN A BUNCH OF CASES, THE SOLE QUESTION DECIDED BY HON'BLE HI GH COURT WAS AS UNDER:- WHETHER THE TAX PAID BY THE EMPLOYER ON THE SALARY/REMUNERATION OF THE EMPLOYEE WOULD CONSTITUTE NON MONETARY BENEFIT AND AS SUCH THE SAME WOULD BE EXEMPTE D U/S 10(10CC OF THE INCOME TAX ACT, 1961). THE SAME HAS BEEN REPLIED BY THE HON'BLE HIGH COURT I N PARA 10 WHICH IS REPRODUCED AS UNDER:- THERE IS NO DISPUTE THAT THE EMPLOYER HAS ENTERED INT O AGREEMENTS WITH THE EMPLOYEES AND THEREBY HAS TAKEN O VER AN OBLIGATION TO PAY INCOME TAX PAYABLE BY THE EMPLOYE ES. IF THE EMPLOYER WAS NOT OBLIGED TO PAY SUCH INCOME TAX, THE SAME WOULD HAVE BEEN PAYABLE BY THE EMPLOYEES IN QUESTION. SUCH PAYMENT AS HAS BEEN PROVIDED IN SECTION 10(10CC) IS ITA NO.6068,6069 & 6070/DEL/12 5 NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 200 OF THE COMPANIES ACT, 1956. THEREFORE, THE PAYMENT OF TAX T O THE INCOME TAX DEPARTMENT ON ACCOUNT OF SALARIES/REMUNERA TIONS OF THE EMPLOYEES NOT BY WAY OF MONETARY PAYMENT TO THE EMPLOYEES CONCERNED, BUT FOR OR ON THEIR ACCOUNT TO THE INCOME TAX DEPARTMENT AND THE SAME BEING ONE OF THE PERQUISI TES INCLUDED IN CLAUSE (2) OF SECTION 17 OF THE ACT, SUCH PAYMENT WAS TO BE EXCLUDED FROM THE INCOME OF THE EMPLOYEES. THE SAME, HAVING BEEN DIRECTED TO BE DONE BY THE TRIBUNAL, WH ILE WE ANSWER THE QUESTION AS ABOVE IN FAVOUR OF THE ASSESSEE, RE FUSE TO INTERFERE WITH THE JUDGMENTS AND ORDERS OF THE TRI BUNAL ASSAILED IN THESE APPEALS. 9. IN VIEW OF THE ABOVE JUDICIAL PRONOUNCEMENT, WE FIND THAT THE FACTS AND CIRCUMSTANCES OF THE PRESENT APPEALS ARE SAME A S DECIDED BY THE HON'BLE HIGH COURT OF UTTRAKHAND AND FOLLOWI NG THE ABOVE, WE DO NOT SEE ANY REASON TO INTERFERE IN THE ORDER OF L D CIT(A). THEREFORE, THE APPEALS FILED BY THE REVENUE ARE DISMISSED. 10. ORDER PRONOUNCED IN THE OPEN COURT ON 15TH DAY OF FEBRUARY, 2013. SD/- SD/- (A.D. JAIN) (T.S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DT.15.02.2013. HMS COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. ITA NO.6068,6069 & 6070/DEL/12 6 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. BY ORDER (ITAT, NEW DELHI). DATE OF HEARING 6.2.2013 DATE OF DICTATION 7.2.2013 DATE OF TYPING 7.2.2013 DATE OF ORDER SIGNED BY 15.2.2013 BOTH THE MEMBERS & PRONOUNCEMENT. DATE OF ORDER UPLOADED ON NET 15.2.2013 & SENT TO THE BENCH CONCERNED.