Mr. Ashok Kumar Kapur, New Delhi V. ACIT, New Delhi

ITA 654/DEL/2010

• Counselvise Citation: 65420114 RSA 2010
• Duration Of Justice: 1 year(s) 5 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-08-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 03-08-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 11-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR B R R KUMAR
• Keywords: Additional evidence
• Section: 10(10AA); 2

Judgement Text

ITA NO. 654/DEL/2010 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A NEW DELHI BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 654/DEL/2010 A.Y. : 2006-07 ASHOK KUMAR KAPUR, C/O MR. AJAY KUMAR SHARMA, 14, SCHOOL LANE, BARAKHAMBA ROAD, NEW DELHI 110 001 (PAN/GIR NO. : AAAPK5512D) VS. ACIT, CIRCLE 47(1), 4 TH FLOOR, MAYUR BHAVAN, NEW DELHI 110 001 C.I.T.( APPEALS), XXX, LAXMI NAGAR, DELHI 110 092 (APPELLANT ) (APPELLANT ) (APPELLANT ) (APPELLANT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) ASSEESSEE BY : SH. A JAY KUMAR SHARMA, ADVOCATE DEPARTMENT BY : DR. B.R.R. KUMAR, SR. D.R. ORDER ORDER ORDER ORDER PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DATED 22.10. 2009 PERTAINING TO ASSESSMENT YEAR 2006-07. 2. THE GROUNDS OF APPEAL READ AS UNDER:- (I) THAT THE ASSESSING OFFICER HAS MADE MISTAKE IN T REATING THE COST OF THE CAR AS PERQUISITE TAXABLE U/S 17(2)(I II) WHILE COMPLETING THE ASSESSMENT. IN SO DOING, THE ASSESSI NG OFFICER FAILED TO APPRECIATE THAT THE APPELLANT WA S NOT AN EMPLOYEE OF M/S L&T FINANCE LIMITED. ACCORDINGLY, NO EMPLOYER-EMPLOYEE RELATIONSHIP EXISTED BETWEEN THE APPELLANT AND L&T FINANCE LIMITED SO AS TO INVOKE ITA NO. 654/DEL/2010 2 PROVISIONS OF SECTION 17(2) OF THE INCOME TAX ACT. THE HONBLE C.I.T.(A) HAS ALSO DONE THE MISTAKES IN PAS SING THE ORDER. (II) WITHOUT PREJUDICE TO GROUND OF APPEAL NO. 1 TH E ASSESSING OFFICER AND THE LD. COMMISSIONER OF INCOME TAX (APPE ALS) FAILED TO APPRECIATE THAT THE EXPENSES ON RUNNING A ND MAINTENANCE OF THE CAR HAD SUFFERED FBT IN THE HANDS OF EMPLOYER, M/S LARSEN AND TOURBO LIMITED (L&T). ACCORDINGLY, BOTH THE RESPONDENTS HAVE MADE THE MISTAKES IN TREATING THE VALUE OF BENEFIT AS LIABLE TO TAX U/S 17(2). (III) THAT, THE ASSESSING OFFICER AND LD. COMMISSIO NER OF INCOME TAX (APPEALS) HAVE DONE ERROR IN DISALLOWING THE REBATE U/S 10(10AA) OF THE INCOME TAX ACT IN RESPEC T OF LEAVE ENCASHMENT RECEIVED AT THE TIME OF RESIGNATION IN LIGHT OF THE AFORESAID JUDGEMENTS. 3. IN THIS CASE ASSESSING OFFICER NOTED THAT ASSES SEE WAS OWING ONE HUNDAI ACCENT CAR WHICH WAS PROVIDED TO HIM BY THE E MPLOYER. ASSESSING OFFICER OPINED THAT IT IS A BENEFIT DER IVED BY HIM IN ADDITION TO THE SALARY RECEIVED AS AN EMPLOYEE AND IT HAD TO BE ADDED AS PERQUISITE TO THE TOTAL INCOME OF THE ASSESSEE. AS SESSING OFFICER CONCLUDED THAT THE BENEFIT GRANTED TO THE ASSESSEE BY THE EMPLOYER IS TAXABLE IN SECTION 17(2)(III). HE ESTIMATED THE VA LUE OF CAR AT ` 5,00,000/- AND HELD THAT THE BENEFIT OF ` 5,00,000/ - DERIVED BY THE ASSESSEE IS INCLUDED IN HIS TOTAL INCOME PERQUISI TE AS PER SECTION 17(2)(III) OF THE IT ACT. ITA NO. 654/DEL/2010 3 4. BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS ) ASSESSEE SUBMITTED AS UNDER:- IN THIS APPEAL, THERE IS A DISPUTED POINT ABOUT TH E ADDITION OF PERQUISITE OF CAR VALUE OF ` 5,00,000/- IN THE T AXABLE INCOME OF THE APPELLANT. FURTHER TO SAY THAT THE APPELLANT WAS WORKING WITH M/ S LARSEN AND TOURBO AS VICE PRESIDENT DURING THE YEAR . THE EMPLOYER I.E. M/S L&T LIMITED HAD TAKEN HYUNDAI ASCE NT CAR NO. DL4CS-2595 ON LEASE FROM M/S L&T FINANCE LIMITED AND HAS PERMITTED THE APPELLANT TO USE THE SA ME CAR FOR COMPANYS BUSINESS PURPOSES. THIS CAR HAS BEEN REGISTERED IN THE NAME OF THE APPELLANT IN HIS CAPA CITY AS NOMINEE OF THE COMPANY. THE LEGAL OWNERSHIP OF THE CAR VESTS WITH M/S L&T FINANCE LIMITED. A CERTIFICATE I N THIS RESPECT IS ISSUED BY M/S L&T FINANCE LTD. THE COPY OF THE SAME CERTIFICATE IS BEING ENCLOSED HEREWITH AS ANNE XURE A. THE EMPLOYER PAYS THE LEASE RENT IN RESPECT OF THIS CAR TO M/S L&T FINANCE LIMITED. THE EMPLOYER HAS PAID THE FR INGE BENEFIT TAX IN RESPECT OF LEASE RENT PAID TO M/S L&T FINANCE LIMITED FOR THIS CAR. A CERTIFICATE TO THIS EFFECT IS ALSO ISSUED BY M/S L&T LIMITED, THE EMPLOYER, WHICH WAS SUBMITTED TO THE ASSESSING OFFICER IN THIS RESPECT. THE COPY OF THE SAME IS BEING ENCLOSED AS ANNEXURE B. THIS CAR WAS G IVEN TO THE APPELLANT TO USE THE SAME WHOLLY, NECESSARILY AN D EXCLUSIVELY FOR THE OFFICIAL PURPOSE. THE CERTIFIC ATE ISSUED BY M/S L&T FINANCE LTD. SPECIFICALLY SAYS THAT THE HYUND AI ACCENT CAR BEARING REGISTRATION NO. DL4CS-2595 BEL ONGS TO ITA NO. 654/DEL/2010 4 THEM AND THIS CAR HAS BEEN GIVEN ON LEASE TO M/S L&T LIMITED. SINCE, THIS CAR IS IN THE OWNERSHIP OF M/ S L&T FINANCE LTD. AND GIVEN ON LEASE TO M/S L&T LIMITED, N O PERQUISITE ON THIS ACCOUNT CAN BE ADDED IN THE HAND S OF THE EMPLOYEE, THE APPELLANT. SINCE THIS CERTIFICATE WA S ISSUED LATER BY M/S L&T FINANCE LTD., AFTER PASSING THE AS SESSMENT ORDER, GIVING THE CLEAR PICTURE OF THE FACT, THEREF ORE THIS APPLICATION IS BEING PRESENTED UNDER RULE 46A OF TH E INCOME TAX RULES TO ADMIT THIS CERTIFICATE. 4.1 LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS SENT THE ADDITIONAL EVIDENCES TO THE ASSESSING OFFICER FOR HIS COMMENTS. HOWEVER, ASSESSING OFFICER DID NOT SUBMIT ANY REPOR T. LD. COMMISSIONER OF INCOME TAX (APPEALS) PROCEEDED TO HO LD THAT THE ASSESSING OFFICER HAS RIGHTLY BROUGHT TO TAX THE A MOUNT OF ` 5 LACS, AS PERQUISITE OF THE ASSESSEE. 5. AGAINST THE ABOVE ORDER, THE ASSESSEE IS IN APP EAL BEFORE US. 6. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE R ECORDS. WE FIND THAT IT IS THE ASSESSEES CASE THAT THE CAR WA S TAKEN BY HIS COMPANY ON HIRE BASIS FROM ITS SISTER CONCERN AND PRO VIDED TO THE ASSESSEE FOR OFFICIAL USE, THEREFORE, THERE IS NO P ERQUISITE. HOWEVER, ASSESSING OFFICER HAD TAXED AS PERQUISITE ON THE G ROUND THAT THE CAR WAS PURCHASED BY THE SISTER CONCERN IN THE NAME OF THE ASSESSEE AND THE LEASE RENTALS WERE PAID BY THE ASSESSEES EMPLOY ER TO ITS SISTER CONCERN. WE FIND IN THIS REGARD, THAT ASSESSEE HA S SUBMITTED ADDITIONAL EVIDENCES BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) AND BY WAY OF ADDITIONAL EVIDENCES, IT W AS SUBMITTED THAT M/S L&T FINANCE LIMITED HAD PURCHASED HYNDAI ACCENT CA R AND IS ITA NO. 654/DEL/2010 5 OWNER THEREOF. THIS CAR HAS BEEN GIVEN ON LEASE TO M/S LARSEN & TOURBO LIMITED DURING F.Y. 2005-06. FURTHER, A CERT IFICATE WAS SUBMITTED BY M/S LARSEN AND TOURBO LIMITED WHICH RE AD UNDER:- TO WHOMSOEVER IT MAY CONCERN WE HEREBY CERTIFY THAT MR. ASHOK KUMAR KAPUR IS AN EMPLOYEE OF M/S LARSEN & TOURBO LIMITED DURING THE FINANCIAL YEAR 2005-06. M/S LARSEN AND TOURBO LIMITED HAS TAKEN HYNDAI ACCENT CAR NO. DL4CS-2595 ON LEASE FORM M/S L&T FINANCE LIMITED AND HAS PERMITTED MR. ASHOK KUMAR KAPUR TO USE THE CA R FOR THE COMPANYS BUSINESS PURPOSE. THE CAR HAS BEEN REGISTERED IN THE NAME OF MR. ASHOK KUMAR KAPUR IN HIS CAPACITY AS NOMINEE OF THE COMPA NY. THE LEGAL OWNERSHIP OF THE CAR VESTS WITH M/S L&T FIN ANCE LIMITED. M/S LARSEN & TOURBO PAYS THE LEASE RENT IN RESPECT O F THIS CAR TO M/S L&T FINANCE LIMITED. WE ALSO CERTIFY THAT WE HAVE PAID FRINGE BENEFIT T AX DURING F.Y. 2005-06 IN RESPECT OF LEASE RENT PAID TO M/S L&T FINANCE LIMITED FOR THIS CAR PROVIDED TO MR. ASHOK KUM AR KAPUR. SD/- (ROHIT SINHA) HEAD- HUMAN RESOURCES DATE: 9 TH JANUARY, 2009 ITA NO. 654/DEL/2010 6 PLACE : FARIDABAD 7. WE FIND THAT THE ADDITIONAL EVIDENCE BY WAY OF THIS CERTIFICATE HAS NOT BEEN PROPERLY APPRECIATED BY THE LD. COMMISS IONER OF INCOME TAX (APPEALS). HE HAS MENTIONED THAT ASSESSING OF FICER WAS ASKED FOR THE REMAND REPORT, BUT ASSESSING OFFICER HAS NO T SUBMITTED THE SAME. IN OUR CONSIDERED OPINION, INTEREST OF JUST ICE WILL BE SERVED, IF THE ISSUE IS REMITTED TO THE FILES OF THE ASSESSING OFFICER TO CONSIDER THE SAME AFRESH IN LIGHT OF THE ADDITIONAL EVIDENCE S SUBMITTED BY THE ASSESSEE. ACCORDINGLY, THE ISSUE STANDS REMITTED TO THE FILES OF THE ASSESSING OFFICER. 8. WE FIND THAT THERE NO ADJUDICATION ON GROUND N O. 3 RAISED IN THE APPEAL BEFORE US. HENCE, THIS ISSUE ALSO STANDS REMITTED TO THE FILES OF THE ASSESSING OFFICER TO CONSIDER THE SAME AFRES H. NEEDLESS TO ADD THAT THE ASSESSEE SHOULD BE GRANTED ADEQUATE OPPORT UNITY OF BEING HEARD. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 03/8/2011, UP ON CONCLUSION OF HEARING. SD/- SD/- [R.P. TOLANI] [R.P. TOLANI] [R.P. TOLANI] [R.P. TOLANI] [SHAMI [SHAMI [SHAMI [SHAMIM YAHYA] M YAHYA] M YAHYA] M YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 03/8/2011 SRB COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3.CIT 4.CIT (A) 5. DR, IT AT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES