Karnataka Power Transmission Corporation Ltd., Bangalore V. DCIT, Bangalore

ITA 615/BANG/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 7768 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-06-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 26-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: FARHAT HUSSAIN QURESHI CITI
• Assessee Lawyers: A C RAJU

Judgement Text

ITA.615/BANG/2011 PAGE - 1 IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH 'B', BANGALORE BEFORE SHRI. N. BARATHVAJA SANKAR, VICE PRESIDENT AND SMT. P. MADHAVI DEVI, JUDICIAL MEMBER I.T.A NO.615/BANG/2011 (ASSESSMENT YEAR 2008-09) KARNATAKA POWER CORPORATION LTD., 7TH FLOOR, CAUVERY BHAVAN, K. G. ROAD, BANGALORE 560 009 .. APPELLANT PAN AABCK7281M V. DEPUTY COMMISSIONER OF INCOME-TAX (LTU) BANGALORE .. RESPONDENT APPELLANT BY : SHRI. A. C. RAJU, CA RESPONDENT BY : SHRI. FARHAT HUSSAIN QURESHI, CIT- I DATE OF HEARING : 20.06.2012 DATE OF PRONOUNCEMENT : 20.06.2012 O R D E R PER N. BARATHVAJA SANKAR, VICE PRESIDENT : THIS IS AN APPEAL FILED BY THE ASSESSEE, M/S. KARN ATAKA POWER TRANSMISSION CORPORATION LTD., BANGALORE, AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) LTU, BANGALORE , DATED.24.03.2011, FOR THE ASSESSMENT YEAR 2008-09. ITA.615/BANG/2011 PAGE - 2 02. THE FACTS OF THE CASE ARE THAT THE ASSESSEE, WH ICH IS A COMPANY ENGAGED IN TRANSMISSION OF ELECTRICITY, FILED ITS R ETURN OF FRINGE BENEFITS FOR THE ASSESSMENT YEAR 2008-09 ON 30.09.2 008 DECLARING A TOTAL VALUE OF FRINGE BENEFITS AMOUNTING TO RS.2,35 ,06,460/-, LATER REVISED TO RS.3,14,10,808/-. THE ASSESSMENT WAS COM PLETED U/S.115WE(3) ON 25.11.2010 ASSESSING THE TAXABLE VA LUE OF FRINGE BENEFIT AT RS.3,47,50,412/-. OUT OF THE TOTAL ADDI TION MADE AN ADDITION OF RS.1,58,32,136/- WAS MADE ON ACCOUNT OF EXPENDIT URE INCURRED ON REPAIRS AND MAINTENANCE OF RESIDENTIAL QUARTERS. BE ING AGGRIEVED WITH THE ADDITION OF RS.1,58,32.136/- TO FRINGE BENEFIT TAX, THE ASSESSEE APPEALED BEFORE THE COMMISSIONER OF INCOME-TAX (APP EALS). 03. THE COMMISSIONER OF INCOME-TAX (APPEALS) AFTER CONSIDERING THE ISSUE AT LENGTH BY RELYING ON THE DECISION OF T HE HON'BLE MADRAS HIGH COURT IN THE CASE OF CIT V. MADRAS CEMENTS LTD (2002) 254 ITR 423, ALSO CONSIDERING THE DEFINITION OF 'FRINGE BEN EFITS' AS GIVEN IN SECTION 115 WB(1) HAD OPINED THAT ON A PLAIN READIN G OF THE PROVISIONS OF THE SECTION IT WAS CLEAR THAT IF AN E MPLOYEE WAS NOT LIABLE TO PAY TAX ON ANY BENEFIT, THEN IT WOULD FALL WITHI N THE SCOPE OF THE PROVISIONS OF SEC. 115 WB(1). SHE ALSO PLACED RELI ANCE ON THE CBDT CIRCULAR NO.8 OF 2005, DATED.29.08.2005 AND HELD TH AT THE EXPENDITURE OF RS.1,58,32,136/- INCURRED ON REPAIRS AND MAINTEN ANCE OF EMPLOYEES' ITA.615/BANG/2011 PAGE - 3 RESIDENTIAL QUARTERS FALLS WITHIN THE SCOPE OF CLAU SE (E) OF SUB-SECTION (2) OF SEC.115WB RELATING TO EMPLOYEES' WELFARE AND IS ACCORDINGLY LIABLE TO FBT. FURTHER AGGRIEVED, ASSESSEE IS IN A PPEAL BEFORE US. 04. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT SIMILAR ISSUE WAS CONSIDER ED BY THE COORDINATE BENCH OF THIS TRIBUNAL IN THE ASSESSEE'S OWN CASE IN ITA NO.983/BANG/2010, DATED.31.05.2011, WHEREIN THE MAT TER WAS DECIDED IN FAVOUR OF THE ASSESSEE, BY HOLDING AS UNDER : '.HOWEVER, WE WOULD LIKE TO EMPHASIZE THAT IN THE INSTANT CASE, THE ASSESSEE HAD INCURRED EXPENDITURE TO UPKE EP ITS ASSETS WHICH DOESN'T MEAN TO INFER EVEN REMOTELY THAT THE BENEFITS AND AMENITIES PROVIDED TO ITS EMPLOYEES EITHER DIRECTLY OR INDIRECTLY AND, THUS, BOARD'S CIRCULAR REFERRED SUPRA CANNOT C OME TO REVENUE'S RESCUE IN ANY WAY.' FOLLOWING THE SAME, WE ALLOW THE APPEAL FILED BY TH E ASSESSEE. 05. ORDER PRONOUNCED IN THE OPEN COURT ON 20.06.201 2. SD/- SD/- (SMT. P. MADHAVI DEVI) (N. BARATHVAJA SANKAR) JUDICIAL MEMBER VICE PRESIDENT ITA.615/BANG/2011 PAGE - 4