ACIT-5(1)(1), MUMBAI, MUMBAI V. M/s. INDIAN AIRLINES LTD. ( NOW KNOWN AS NATIONAL AVIATION COMPANY OF INDIA LTD.), DELHI

ITA 6099/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 3334 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-06-2021
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 26-09-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PRATAP SINGH
• Assessee Lawyers: AKSHI SINGAL
• Keywords: Set aside
• Section: 143(3); 113; 153

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL , C BENCH MUMBAI BEFORE : SHRI M.BALAGANESH, A CCOUNTANT M EMBER & SHRI PAVAN KUMAR GADALE , JUDICIAL MEMBER ITA NO. 6 0 99 /MUM/ 20 19 ( ASSESSMENT YEAR : 20 0 6 - 07 ) ACIT - 5(1)(1) ROOM NO.568, 5 TH FLOOR AAY AKAR BHAVAN M.K.ROAD, MUMBAI - 400020 VS. M/S. NATIONAL AVIATION COMPANY OF INDIA LTD (FORMERLY INDIAN AIRLINES LTD.,) AIRLINES HOUSE, 113 GURUDWARA RAKAB GANJ ROAD NEW DELHI 110 001 PAN/GIR NO. AAACI0613E (APPELLANT ) .. (RESPONDENT ) REVENUE BY SHRI P RATAP SINGH ASSESSEE BY SHRI RAJNISH AGGARWAL & MS. AKSHI SINGAL DATE OF HEARING 01 / 06 /202 1 DATE OF PRONOUNCEMENT 04 / 06 /202 1 / O R D E R PER M. BALAGANESH (A.M) : THIS APPEAL IN ITA NO. 6099/MUM/2019 FOR A.Y. 2006 - 07 ARISES OUT OF THE ORDER BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - 34, NEW DELHI IN APPEAL NO. 269/2009 - 10 DATED 29/07/2019 (LD. CIT(A) IN SHORT) AGAINST THE ORDER OF ASSESSMENT PASSED U/S. 115WE(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS ACT) BY THE LD. DY. COMMISSIONER OF INCOME TAX, CIRCLE - 11(1), NEW DELHI (HEREINAFTER REFERRED TO AS LD. AO). ITA NO . 6099/MUM/2019 M/S. INDIAN AIRLINES LTD., 2 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED I N ALLOWING RELIEF TO THE ASSESSEE TO THE EXTENT IMPUGNED IN THE GROUNDS ENUMERATED BELOW: 1. 'WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) HAS ERRED IN DIRECTING THE AO TO VALUE THE FRINGE BENEFIT IN RESPECT OF FREE/CONCE SSIONAL TICKETS TO THE EMPLOYEES AT PAR WITH THE PROVISIONS MADE IN RESPECT OF FREQUENT FLIER PROGRAMME (FPP) AND THEREAFTER THE AMOUNTS RECOVERED FROM THE EMPLOYEES IF ANY SHOULD BE REDUCED?'. 2. FOR THIS AND OTHER GROUNDS THAT MAY BE URGED AT THE TIM E OF HEARING, THE DECISION OF THE CIT(A) MAY BE SET ASIDE AND THAT OF THE AO BE RESTORED. 3. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE FIND THAT ASSESSEE HAD FILED ITS RETURN OF FRINGE BENEFITS FOR THE A.Y.2006 - 07 DECLARING TOTAL FRINGE BENEFITS OF RS.25,21,45,000/ - . IN THIS F RINGE B ENEFIT T AX (FBT) RETURN, THE VALUE OF FRINGE BENEFITS ON ACCOUNT OF FREE/CONCESSIONAL TICKETS PROVIDED TO ITS EMPLOYEES AND THEIR FAMILY MEMBERS WAS CONSIDERED AT NIL BY THE ASSESSEE. THE LD. AO IN THE ASSESSMENT FRAMED U/S.115WE(3) OF THE ACT FOR FRINGE BENEFIT TAX , DETERMINED THE VALUE OF FRINGE BENEFITS ON ACCOUNT OF FREE / CONCESSIONAL TICKETS GIVEN TO EMPLOYEES AND THEIR FAMILY MEMBERS AT RS.86,42,22,000/ - . THE ASSESSEE AGITATED T HIS ASSESSMENT BEFORE THE LD. CIT(A). WE FIND THAT THE LD. CIT(A) BY PLACING RELIANCE ON THE CO - ORDINATE BENCH DECISION OF THIS TRIBUNAL IN THE CASE OF JET AIRWAYS INDIA LTD., VS. DCIT REPORTED IN 153 TTJ 624 FOR A.Y.2006 - 07 TO 2008 - 09 DIRECTED THE LD. AO TO VERIFY THE FRINGE BENEFIT IN RESPECT OF FREE / CONCESSIONAL AIR TICKETS GIVEN TO THE EMPLOYEES AND THEIR FAMILY MEMBERS AT PAR WITH THE PROVISION MADE IN RESPECT OF FREQUENT FLYER PROGRAMME (FFP). BEFORE US, THE LD. DR VEHEMENTLY ARGUED THAT THE VALUATI ON OF FRINGE BENEFITS IN RESPECT OF FREE / CONCESSIONAL AIR TICKETS GIVEN TO EMPLOYEES IS TO BE DONE BY FOLLOWING THE VALUATION METHOD PRESCRIBED IN ITA NO . 6099/MUM/2019 M/S. INDIAN AIRLINES LTD., 3 CBDT CIRCULAR NO.8/2005 DATED 29/08/2005. HE ALSO ARGUED THAT THE FREQUENT FLYER PROGRAMME OF EVERY AIRLINE OPERATES ON DIFFERENT PARAMETERS AND THAT THE VALUE OF FFP OF ONE AIRLINE CANNOT BE ADOPTED FOR OTHER AIRLINE. 3.1. PER CONTRA, THE LD. AR STATED THAT ALL THE ARGUMENTS OF THE LD. DR HAD ALREADY BEEN CONSIDERED BY THIS TRIBUNAL WHILE RENDERING THE DECIS ION OF JET AIRWAYS REFERRED TO SUPRA. HE VEHEMENTLY ARGUED THAT THE COST OF FREE / CONCESSIONAL TICKETS PROVIDED TO EMPLOYEES AND THEIR FAMILY MEMBERS BEING STAND BY TICKETS ARE SUBJECT TO LOAD / VACANCIES AND HENCE CANNOT BE COMPARED WITH COST OF TICKETS ISSUED TO THE GENERAL PUBLIC WHICH WAS ADOPTED BY THE LD. AO FOR VALUATION OF FBT. HE ARGUED THAT EMPLOYEES AND THEIR FAMILY MEMBERS WOULD BE PROVIDED FREE / CONCESSIONAL TICKETS ONLY IF THERE IS VACANCY OF SEATS IN THE AIRLINE. WE FIND THAT THE ISSUE IN DISPUTE WITH REGARD TO VALUATION OF FRINGE BENEFITS ON ACCOUNT OF FREE / CONCESSIONAL AIR TICKETS GIVEN TO EMPLOYEES AND THEIR FAMILY MEMBERS IS SQUARELY COVERED BY THE DECISION RENDERED BY THIS TRIBUNAL IN THE CASE OF JET AIRWAYS INDIA LTD., VS DCIT REPOR TED IN 153 TTJ 624 VIDE ITS ORDER DATED 30/01/2013 FOR A.YRS. 2006 - 07 TO 2008 - 09. THE RELEVANT PORTION OF THE SAID JUDGMENT TOGETHER WITH ITS FACTS ARE REPRODUCED HEREUNDER: - 3. GROUND NO. 2 TO 6 RELATES TO LEVY OF FRINGE BENEFIT TAX ON FREE/CONCESSI ONAL TICKETS ISSUED TO THE EMPLOYEES FOR PRIVATE JOURNEYS. 4. FACTS GIVING RISE TO THIS GRIEVANCE SHOW THAT WHILE SCRUTINIZING THE RETURN OF FBT U/S. 115WE[3], THE ASSESSING OFFICER NOTICED THAT DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS GI VEN FREE/CONCESSIONAL TICKETS TO ITS EMPLOYEES FOR THEIR PRIVATE JOURNEYS. THE AO FURTHER OBSERVED THAT DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS FOR THE YEAR UNDER CONSIDERATION U/S. 143(3) OF THE ACT, A SPECIAL AUDIT U/S. 142(2 A) OF THE ACT WAS CARRIED OUT. THE SPECIAL AUDITORS IN THEIR REPORT HAVE GIVEN A CATEGORICAL FINDING THAT THE COMPANY HAS ISSUED 2,48,334 ITA NO . 6099/MUM/2019 M/S. INDIAN AIRLINES LTD., 4 FREE/CONCESSIONAL TICKETS TO ITS EMPLOYEES. THE AO ALSO OBSERVED THAT THE AUDITORS HA VE TAKEN THE AVERAGE VALUE OF EACH FREE/CONCESSIONAL TICKETS AT RS. 5510/ - . CONSIDERING THE FACT THAT THE COMPANY HAS ISSUED 2,48,334 TICKETS THE AUDITORS COMPUTED THE VALUE OF TAXABLE FRINGE BENEFIT AT RS.136,83,20,340/ - . HOWEVER, THE AO NOTICED THAT THE ASSESSEE HAS TAKEN THE VALUE OF FRINGE BENEFIT ON ACCOUNT OF THIS ISSUE AT NIL. THE AO SOUGHT EXPLANATION FROM THE ASSESSEE. THE ASSESSEE STRONGLY OBJECTED FOR THE LEVY OF FBT ON FREE/CONCESSIONAL TICKETS ON THE GROUND THAT A TICKET IS ISSUED TO THE EMPLOY EE IS ALWAYS SUBJECT TO LOAD I.E THE EMPLOYEE WOULD BE ALLOWED TO BOARD THE AIRCRAFT ONLY IF THERE IS ANY VACANT SEAT AVAILABLE. THE ASSESSEE ALSO STRONGLY OBJECTED TO THE NUMBER OF TICKETS TAKEN BY THE AUDITORS AT 2,48,334 WHEREAS THE ACTUAL NO. OF TICKET S ISSUED WERE AT 74,637. THE ASSESSEE ALSO OBJECTED TO THE METHOD OF VALUATION OF FRINGE BENEFIT. THE ASSESSEE PROVIDED THREE METHODS AS UNDER: 1 ) MINIMUM FARE METHOD : IN THIS ALTERNATIVE METHOD THE ASSESSEE COMPANY HAS ADOPTED MINIMUM VALUE AT WHICH THE TIC KET IS SOLD TO GENERAL PUBLIC IN RESPECT OF ANY PARTICULAR FLIGHT. 2) COST TO THE COMPANY : IN THIS METHOD THE COMPANY HAS EVALUATED THE FRINGE BENEFIT VALUE OF EACH TICKET ON THE BASIS OF BREAK - UP VALUE WHEREIN IT HAS TAKEN AIRCRAFT FUEL, CRS CHARGES, FOO D AND CABIN CHARGES, PRINTING & STATIONERY AND HAS ARRIVED VALUE PER TICKET AT RS. 446.06. 3) J.P. MILAGE : THE VALUATION METHOD FOR THIS PURPOSE ADOPTED BY THE ASSESSEE IS NET OF THE CONCESSION GIVEN TO THE FREQUENT FLYERS. 5. HOWEVER, THE SUBMISSIONS M ADE BY THE ASSESSEE DID NOT FIND FAVOUR FROM THE AO WHO WAS OF THE OPINION THAT PROVISIONS OF SEC. 115WC(1A) SQUARELY APPLIES ON THE FACTS OF THE CASE AND THE METHOD OF COMPUTATION OF THE VALUE OF FBT IS ALSO PROVIDED UNDER THE ACT AND ACCORDINGLY PROCEEDE D TO ADOPT THE VALUE OF EACH CONCESSIONAL/FREE TICKETS AT RS. 5510/ - AS WORKED OUT BY THE SPECIAL AUDITORS AND REJECTING THE NO. OF TICKETS AS POINTED OUT BY THE ASSESSEE, TOOK THE NO. OF TICKETS AS POINTED OUT BY THE SPECIAL AUDITORS AND COMPUTED THE VALU E OF TAXABLE FRINGE BENEFIT AT RS.136,83,20,340/ - . 6. AGGRIEVED, ASSESSEE AGITATED THIS MATTER BEFORE THE LD. CIT(A) BUT WITHOUT ANY SUCCESS. LD. CIT(A) WAS CONVINCED THAT PROVISIONS OF SEC. 115WC(1A) R.W. CBDT CIRCULAR NO. 8 DT. 29.8.2005 APPLIED ON THE FACTS OF THE CASE AND HELD THAT THE AO HAS CORRECTLY COMPUTED THE VALUE OF FRINGE BENEFIT AT RS. 136,83,20,340/ - UNDER THE HEAD FREE/CONCESSIONAL TICKETS FOR EMPLOYEES OR THEIR FAMILY MEMBERS. 7. AGGRIEVED BY THIS FINDING OF LD. CIT(A), ASSESSEE IS BEFORE US. THE LD. COUNSEL FOR THE ASSESSEE STRONGLY SUBMITTED THAT FBT IS NOT AT ALL LEVIABLE ON THE IMPUGNED FREE/CONCESSIONAL TICKETS PROVIDED TO THE EMPLOYEES OR THEIR FAMILY MEMBERS FOR ITA NO . 6099/MUM/2019 M/S. INDIAN AIRLINES LTD., 5 THEIR PRIVATE JOURNEYS. IT IS THE SAY OF THE COUNSEL THAT THE ASSESSEE COMPANY NEVER ISSUED ANY TICKET TO THE EMPLOYEE THEREFORE PROVISIONS OF SEC. 115WB(1B) ARE NOT APPLICABLE. THE LD. COUNSEL FURTHER SUBMITTED THAT EVEN IF IT IS ASSUMED THAT THE SLIPS/COUPONS COME WITHIN THE PURVIEW OF TICKETS THEN ALSO THE BASIS OF VALUATI ON ADOPTED BY THE AO IS INCORRECT AND AGAINST THE FACTS OF THE CASE. THE LD. COUNSEL FURTHER POINTED OUT THAT THE SPECIAL AUDITORS IN THEIR SUPPLEMENTARY AUDIT REPORT EXHIBITED FROM PAGES 35 TO 49 OF THE PAPER BOOK HAVE ACCEPTED THAT 76633 COUPONS WERE ONL Y ISSUED TO THE EMPLOYEES FOR VACATION WHICH MAY BE CONSIDERED AS THE FRINGE BENEFIT TO EMPLOYEES THEREFORE THE TOTAL NUMBER OF COUPONS TAKEN BY THE AO AT 248334 IS AGAINST THE FINDING OF THE SPECIAL AUDITORS. 7.1 THE LD. COUNSEL FOR THE ASSESSEE FURTHER P OINTED OUT THAT THE VALUE OF FRINGE BENEFIT HAVE TO BE TAKEN AS PER PROVISIONS OF SEC. 115WC(1A) WHICH PROVIDES THAT 'COST AT WHICH THE BENEFITS REFERRED TO IN CLAUSE (B) OF SUB - SECTION (1) OF SEC. 115 WB IS PROVIDED BY THE EMPLOYER TO THE GENERAL PUBLIC AS REDUCED BY THE AMOUNT, IF ANY, PAID BY OR RECOVERED FROM ITS EMPLOYEES. IT IS THE SAY OF THE COUNSEL THAT THE TICKETS ISSUED TO THE EMPLOYEES CANNOT BE COMPARED WITH THE TICKETS ISSUED TO THE GENERAL PUBLIC FOR THE FOLLOWING REASONS: I) TICKETS ISSUED T O THE EMPLOYEES DO NOT GIVE ANY INHERENT RIGHT TO BOARD THE FLIGHT BECAUSE AN EMPLOYEE WOULD BE ALLOWED TO BOARD THE FLIGHT ONLY IF THERE IS AVAILABILITY OF THE LOAD OR THE SEAT IS VACANT WHEREAS TICKET ISSUED TO THE GENERAL PUBLIC GIVE THEM VESTED RIGHT T O BOARD THE PLANE. II) IF THE SEAT IS NOT VACANT OR THE LOAD DOES NOT PERMIT, THE EMPLOYEE HAS TO RETURN BACK WITHOUT TAKING THE FLIGHT. THE SAME CANNOT BE SAID TO THE MEMBER OF THE GENERAL PUBLIC. III) FURTHER TICKETS ISSUED TO THE GENERAL PUBLIC GIVE C ONFIRMED BOOKING FOR THE DATE OF TRAVEL, FLIGHT ETC. WHEREAS CONFIRM TICKETING IS NOT GIVEN TO FREE/CONCESSIONAL TICKETS TO EMPLOYEES. SUCH TICKETS ARE ONLY ' STAND BY ' TICKETS SUBJECT TO LOAD/VACANCIES WHICH MEANS THAT THE TICKETS ISSUED TO THE EMPLOYEES CARRY LOWEST PRIORITY. 7.2. POINTING OUT FURTHER DIFFERENCE BETWEEN THE TWO, THE LD. COUNSEL STATED THAT IN CASE OF THE FLIGHT IS DELAYED OR CANCELLED, PASSENGER FROM THE GENERAL PUBLIC IS ENTITLED TO HOTEL ACCOMMODATION CONVENIENCE AND OTHER FACILITIES W HEREAS THE EMPLOYEES ARE NOT ENTITLED TO SUCH FACILITIES. FURTHER IF FOR SOME REASON, THE BOARDING IS DENIED TO THE PASSENGER FROM GENERAL PUBLIC, IT IS THE DUTY OF THE AIRLINE TO PROVIDE ALTERNATIVE FLIGHT WHEREAS THE SAME FACILITY IS NOT PROVIDED TO THE EMPLOYEES OF THE COMPANY WHO HAVE BEEN GIVEN FREE/CONCESSIONAL TICKETS. THE LD. COUNSEL THUS CONCLUDED THAT THE COST OF THE TICKET ISSUED TO THE GENERAL PUBLIC IS NOT AT PAR WITH THE TICKETS ISSUED TO THE EMPLOYEES. 7.3. IN ALTERNATIVE, THE LD. COUNSEL SUG GESTED THAT IF AT ALL SOME VALUE HAS TO BE ALLOCATED TOWARDS THE COST OF THE FRINGE BENEFIT PROVIDED BY THE EMPLOYER, THEN THE METHOD CONSISTENTLY ADOPTED BY THE COMPANY FOR MAKING PROVISION IN CASE OF THE TICKETS TO BE ISSUED UNDER THE FREQUENT FLYER PROG RAMME (FFP) SHOULD BE ADOPTED. THEREAFTER, THE LD. COUNSEL EXPLAINED THE SCHEME OF FFP. IT WAS EXPLAINED THAT THE JET PRIVILEGE MEMBERS EARN JP MILES EVERY TIME THEY FLY JET AIRWAYS. IN ADDITION, THEY ALSO EARNED JP MILES WHENEVER THEY FLY THROUGH PARTNER ITA NO . 6099/MUM/2019 M/S. INDIAN AIRLINES LTD., 6 AIRLINES OR STAY AT ANY PARTNER HOTELS OR USE PARTNER CAR RENTALS OR TELECOM PARTNER SERVICES. THE JET AIRWAYS HAS RECIPROCAL FFP AGREEMENTS WITH BRITISH AIRWAYS, KLM AND NORTHWEST AIRLINES. BY VIRTUE OF IT, JP MEMBERS CAN REDEEM THEIR MILES FOR FREE FLIGH TS ACROSS THE WORLD ON BRITISH AIRWAYS, KLM AND NORTHWEST AIRLINES. THE LD. COUNSEL FURTHER EXPLAINED THAT JET AIRWAYS HAS A COMPANY BRANDED CREDIT CARD WITH CITIBANK. THIS CARD IS AVAILABLE IN GOLD VARIANT AND HAS AN ANNUAL FEE PAYABLE TOWARDS THE SAME. T HE ADVANTAGE OF THIS CREDIT CARD IS THAT THE CARD USER COLLECTS JP MILES FOR ALL HIS SPENDS USING THE JET AIRWAYS CITIBANK CO. BRANDED CREDIT CARD. THESE JP MILES ARE CREDITED TO THE JET PRIVILEGE ACCOUNT OF THE MEMBER AND CAN BE USED BY HIM FOR FREE FLIGH TS ON JET AIRWAYS OR ANY OF ITS PARTNER AIRLINE. THE PROGRAMME GETS REWARDING DEPENDING ON THE MEMBERSHIP STATUS, I.E. PLATINUM, GOLD, SILVER, BLUE PLUS OR BLUE. OTHER BENEFITS INCLUDE UPGRADES TO PREMIERE, CHECK - IN AT CLUB PREMIERE DESKS, TELE CHECK - IN AN D EXCESS BAGGAGE ALLOWANCE ETC. JP GOLD AND PLATINUM MEMBERS ALSO ENJOY ACCESS TO LOUNGES OF JET AIRWAYS PARTNER AIRLINES, I.E. KLM, BRITISH AIRWAYS AND NORTH WEST AIRLINES. TO TRACK THE MILES EARNED BY EACH MEMBER, A MEMBER IS REQUIRED TO MENTION HIS JP M EMBERSHIP NUMBERS AT THE TIME OF MAKING A BOOKING OR AT THE TIME OF CHECKING IN FOR A FLIGHT. BASED ON THIS INFORMATION AVAILABLE IN THE SYSTEM, THE MILES ARE THEN UPDATED IN EACH MEMBER'S ACCOUNT. THE COST OF THE UNUTILISED MILEAGE LYING TO THE CREDIT OF THE PASSENGERS IS THEN PROVIDED FOR IN THE BOOKS OF ACCOUNTS EACH YEAR. EVERY PASSENGER WHO IS ADMITTED TO THE FREQUENT FLYER PROGRAMME IS ENTITLED TO REDEEM THE UNUTILISED MILES HE HAS EARNED AND THE COMPANY IS UNDER AN OBLIGATION TO GIVE THE BENEFIT OF F REE TRAVEL BASED ON THE MILEAGE HE REDEEMS OUT OF HIS ACCUMULATED MILEAGE. BASED ON THE ABOVE CRITERIA THE TOTAL NUMBER OF MILES EARNED IS ASCERTAINED AND A PROVISION IS MADE IN THE BOOKS OF ACCOUNTS FOR THE COST OF TRAVEL IN FUTURE AGAINST THE NUMBER OF T HE UNUTILISED, REDEEMABLE MILES. THE PROVISION IS CALCULATED ON A YEAR TO YEAR BASIS AS PER THE JP MILES ACCUMULATED, AVERAGE MILES PER REDEMPTION & VARIABLE COST PER PASSENGER. THE COMPUTATION OF THE COST OF THE TICKET TO BE ADOPTED FOR FREE/CONCESSIONAL TICKETS ISSUED UNDER FFP IS ACCEPTED BY THE DEPARTMENT IN EARLIER YEARS. THE ASCERTAINING OF THE LIABILITY IS ON A SCIENTIFIC BASIS. IN THIS REGARD, IT IS PERTINENT TO NOTE THAT THE HON'BLE ITAT, MUMBAI FOR A.Y.1999 - 00 TO A.Y.2005 - 06 HAS ACCEPTED THE METHO D FOLLOWED BY THE ASSESSEE AND HAS ALLOWED THE CLAIM OF THE ASSESSEE IN RESPECT OF THE PROVISION MADE ON ACCOUNT OF FFP. 7.4. THE LD. COUNSEL CONCLUDED THAT THE VALUE TAKEN FOR A.Y. 2006 - 07 FOR THE PROVISIONS OF FFP AT RS. 446.06 IS THE MOST REASONABLE AND FAIR VALUE TO BE ADOPTED FOR COMPUTING THE FRINGE BENEFIT ON TICKETS PROVIDED FREE/CONCESSIONAL TO THE EMPLOYEES. 8. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY PLACED RELIANCE ON THE ORDERS OF THE LOWER AUTHORITIES. THE DR POINTED OUT THAT THE CHARGING SECTION AS WELL AS THE COMPUTATION SECTION IS ABSOLUTELY CLEAR AND UNAMBIGUOUS IN COMPUTING THE VALUE OF FRINGE BENEFIT AND THEREFORE THE SAME SHOULD BE ADOPTED. ITA NO . 6099/MUM/2019 M/S. INDIAN AIRLINES LTD., 7 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES. WE HAVE ALSO CONSIDERED THE PAPER BOOK SUBMITTED BY THE ASSESSEE. AT THE VERY OUTSET, WE DO NOT AGREE WITH THE SUBMISSIONS OF THE COUNSEL THAT FBT IS NOT LEVIABLE ON THE FACTS OF THE PRESENT ISSUE. SECTION 115WB(1)(B) SPECIFICALLY PROVIDES AS UNDER' 'ANY FREE OR CONCESSIONAL TICKETS PROVIDED BY THE EMPLOYER FOR PRIVATE JOURNEYS OF HIS EMPLOYEES OR THEIR FAMILY MEMBERS, CHARGING SECTION IS ABSOLUTELY CLEAR AND UNAMBIGUOUS.' 10. AS IT IS NO T IN DISPUTE THAT THE ASSESSEE HAS PROVIDED FREE/CONCESSIONAL TICKETS TO ITS EMPLOYEES DURING THE YEAR UNDER CONSIDERATION, IT IS LIABLE FOR FRINGE BENEFIT TAX. THE ONLY DISPUTE REMAINS NOW IS WHAT SHOULD BE THE VALUE ASSIGNED TO SUCH FRINGE BENEFIT. THOUG H SEC. 115WC(2)(A) CONTAINS THE PROVISIONS FOR COMPUTING THE COST OF SUCH BENEFIT BUT IN OUR CONSIDERATE VIEW THAT METHOD CANNOT BE APPLIED ON THE FACTS OF THE PRESENT CASE FOR THE SIMPLE REASON THAT THE COST AT WHICH THE BENEFITS ARE PROVIDED TO THE EMPLO YEE CANNOT BE EQUATED WITH THE COST PROVIDED BY THE EMPLOYER TO THE GENERAL PUBLIC. TO THIS EXTENT, WE AGREE WITH THE SUBMISSIONS OF THE COUNSEL THAT THE NEAREST AVAILABLE, LOGICAL AND ACCEPTABLE METHOD IS TO VALUE THE BENEFIT AS PER THE COST ASSIGNED FOR PROVISIONS FOR FFP IN THE BOOKS OF ACCOUNT. MORE SO, BECAUSE SUCH PROVISION HAS BEEN ACCEPTED BY THE DEPARTMENT IN ASSESSEE'S OWN CASE FROM ASSESSMENT YEAR 1999 - 2000 TILL ASSESSMENT YEAR 2005 - 06 AND AS THIS METHOD IS SCIENTIFIC AND HAS ATTAINED FINALITY IN THE DUE COURSE OF TIME SINCE A.Y. 1999 - 2000 , KEEPING IN MIND THAT THE MEMBERS OF THE FFP SCHEME ARE FROM GENERAL PUBLIC. WE, THEREFORE, IN THE INTEREST OF JUSTICE AND FAIR PLAY, RESTORE THIS ISSUE BACK TO THE FILES OF THE AO. THE AO IS DIRECTED TO VALUE THE FRINGE BENEFIT OF FREE/CONCESSIONAL TICKETS AS PER THE VALUATION OF FFP AS PROVIDED BY THE ASSESSEE IN ITS BOOKS OF ACCOUNT AT RS.446.06 AS THE SAME HAS ALSO BEEN ACCEPTED BY THE DEPARTMENT WHILE MAKING PROVISIONS FOR ' FREQUENT FLYER PROGRAMME ' FOR E ARNING JP MILEAGE, AND IF THERE ARE COSTS FOR FOREIGN TRAVELS THE SAME SHOULD BE ELIMINATED FROM THE SAME , THEREAFTER , THE AO IS ALSO DIRECTED TO REDUCE THE COST RECOVERED FROM THE EMPLOYEES . 3.3. SIMILAR DECISION WAS RENDERED BY THE CO - ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF DCIT VS. AIR INDIA LTD., IN ITA NO.1207/MUM/2015, 1208/MUM/2015 AND CO NO.171/MUM/2016 AND CO NO.58/MUM/2017 FOR A.YRS. 2006 - 07 AND 2007 - 08 RESPECTIVELY DATED 11/07/2018. RESPECTFULLY FOLLOWING THE SAID DECISION, THE ISSUE RAISED IN THIS APPEAL IS RESTORED BACK TO THE FILE OF THE LD. AO WITH THE SAME DIRECTIONS AS STATED SUPRA. ITA NO . 6099/MUM/2019 M/S. INDIAN AIRLINES LTD., 8 ACCORDINGLY, THE GROUND RAISED BY THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. 4. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICA L PURPOSES. ORDER PRONOUNCED ON 04 / 06 /202 1 BY WAY OF PROPER MENTIONING IN THE NOTICE BOARD. SD/ - ( PAV AN KUMAR GADALE ) SD/ - (M.BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 04 / 06 / 2021 KARUNA , SR.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//