Popular Vehicles & Services Ltd, Cochin V. DCIT, Ernakulam

ITA 752/COCH/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 77452 (ITAT-COCHIN)
• Duration Of Justice: 6 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-06-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 06-05-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 22-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LATHA V KUMAR
• Assessee Lawyers: P M VEERAMANI
• Keywords: Depreciation; Business expenditure; Commercial expediency
• Section: 43B; 14A; 11

Judgement Text

1 ITA NO. 751-753/COCH/2013 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI B.R. BASKA RAN(AM) I.T.A NO. 751/COCH/2013 - A.Y. 2007-08 I.T.A NO. 752/COCH/2013 - A.Y. 2006-07 I.T.A NO. 753/COCH/2013 - A.Y. 2007-08 POPULAR VEHICLES & SERVICES LTD VS DY.CIT, CENT.C IR.1(3) KUTTUKARAN CENTRE ERNAKULAM MAMANGALAM, KOCHI-25 PAN : AABCP3805G (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI P.M. VEERAMANI RESPONDENT BY : SMT. LATHA V KUMAR DATE OF HEARING : 06-05-2014 DATE OF PRONOUNCEMENT : 06-06-2014 O R D E R PER N.R.S. GANESAN (JM) ALL THE APPEALS OF THE ASSESSEE ARE DIRECTED AGAIN ST THE RESPECTIVE ORDERS OF THE CIT(A) FOR THE ASSESSMENT YEARS 2006- 07 AND 2007-08. SINCE COMMON ISSUES ARISE FOR CONSIDERATION IN ALL THE APPEALS, WE HEARD THEM TOGETHER AND DISPOSE OF THE APPEALS BY THIS CO MMON ORDER. 2 ITA NO. 751-753/COCH/2013 2. LET US FIRST TAKE THE ASSESSEES APPEAL IN ITA N O.751/COCH/2013. THE FIRST GROUND OF APPEAL IS WITH REGARD TO DISALL OWANCE OF PROVISION FOR LEAVE ENCASHMENT US 43B(F) OF THE ACT. 3. SHRI P.M. VEERAMANI, THE LD.REPRESENTATIVE FOR T HE ASSESSEE SUBMITTED THAT THE ASSESSEE CLAIMED A SUM OF RS.5,6 8,688 TOWARDS PROVISION FOR LEAVE ENCASHMENT OF THE EMPLOYEES. H OWEVER, THE ASSESSING OFFICER DISALLOWED THE SAME ON THE GROUND THAT IT W AS NOT PAID ON THE DATE OF FILING OF THE RETURN OF INCOME. ACCORDING TO TH E LD.REPRESENTATIVE, THE PROVISION FOR LEAVE ENCASHMENT IS AN ALLOWABLE EXPE NDITURE. THE LD.REPRESENTATIVE PLACED HIS RELIANCE ON THE JUDGME NT OF THE APEX COURT IN THE CASE OF BHARAT EARTH MOVERS LTD VS CIT (2000) 2 45 ITR 428 (SC). 4. ON THE CONTRARY, SMT. LATHA V KUMAR, THE LD.DR S UBMITTED THAT SUB CLAUSE (F) WAS INTRODUCTION IN SECTION 43B BY FINA NCE, 2001 WITH EFFECT FROM 01-04-2002. ADMITTEDLY, THE ASSESSEE HAS NOT PAID THE LEAVE ENCASHMENT; IT REMAINED A PROVISION. UNDER SECTION 43B(F) UNLESS THE AMOUNT IS PAID IN LIEU OF LEAVE AT THE CREDIT OF TH E EMPLOYEE, IT CANNOT BE ALLOWED AS DEDUCTION. REFERRING TO THE JUDGMENT OF THE CALCUTTA HIGH COURT IN EXIDE INDUSTRIES LTD & ANR VS UOI & ORS (2 007) 292 ITR 470, THE LD.DR SUBMITTED THAT THE CALCUTTA HIGH COURT FOUND THAT THE PROVISIONS OF SECTION 43B(F) IS ARBITRARY AND DE HORS THE APEX COURT JUDGMENT IN BHARAT 3 ITA NO. 751-753/COCH/2013 EARTH MOVERS LTD (SUPRA); ACCORDINGLY, THE PROVISIO NS OF SECTION 43B(F) WAS STRUCK DOWN. THE LD.DR SUBMITTED THAT ON APPEAL BY THE REVENUE THE APEX COURT STAYED THE JUDGMENT OF THE CALCUTTA HIGH COUR T IN EXIDE INDUSTRIES LTD & ANR (SUPRA). THEREFORE, AS ON TODAY, THE PRO VISIONS OF SECTION 43B(F) REMAINS IN THE STATUTE BOOK; HENCE UNLESS IT IS PAI D, IT CANNOT BE ALLOWED AS DEDUCTION. THEREFORE, THE CIT(A) HAS RIGHTLY CONFI RMED THE ORDER OF THE ASSESSING OFFICER. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. SECTION 43B(F) WAS INTRODUCED BY FINANCE ACT, 2000 WITH EFFECT FROM 01-04-2002. IN VIEW OF SECTION 43B ANY SUM PAYABLE BY THE ASSESSEE AS AN EMPLOYER IN L IEU OF ANY LEAVE AT THE CREDIT OF HIS EMPLOYEE SHALL BE ALLOWED ONLY ON ACTUAL PAYMENT IRRESPECTIVE OF THE PREVIOUS YEAR IN WHICH THE LIAB ILITY TO PAY SUCH SUM WAS INCURRED BY THE ASSESSEE. AS RIGHTLY SUBMITTED BY THE LD.DR, THE PROVISIONS OF SECTION 43B(F) WAS STRUCK DOWN BY THE CALCUTTA H IGH COURT AS ARBITRARY AND DE HORS OF THE APEX COURT JUDGMENT IN BHARAT EARTH MOVERS LTD (SUPRA). IT IS ALSO AN ADMITTED FACT THAT THE APEX COURT HAS STAYED THE JUDGMENT OF THE CALCUTTA HIGH COURT IN EXIDE INDUST RIES LTD (SUPRA). THEREFORE, THIS TRIBUNAL BEING A QUASI JUDICIAL AUT HORITY HAS TO DECIDE THE APPEAL ONLY ON THE BASIS OF THE PROVISIONS OF SECTI ON 43B(F) OF THE ACT. IN OTHER WORDS, THE PROVISIONS OF SECTION 43B(F) CANNO T BE IGNORED SINCE THE 4 ITA NO. 751-753/COCH/2013 JUDGMENT OF THE CALCUTTA HIGH COURT IN THE CASE F E XIDE INDUSTRIES LTD (SUPRA) WAS STAYED BY THE APEX COURT. THEREFORE TH E CLAIM OF THE ASSESSEE COULD BE ALLOWED ONLY IF IT IS ACTUALLY PA ID ON THE DUE DATE FOR FILING THE RETURN OF INCOME. IT IS NOT THE CASE OF THE ASSESSEE THAT THE AMOUNT CLAIMED AS LEAVE ENCASHMENT WAS PAID BEFORE THE DUE DATE FOR FILING THE RETURN OF INCOME. SINCE IT REMAINS TO B E PAID, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE CIT(A) HAS RIGHTLY CONFIRMED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. THEREF ORE, WE DO NOT SEE ANY INFIRMITY IN THE ORDER OF THE LOWER AUTHORITY. ACC ORDINGLY, THE SAME IS CONFIRMED. 6. THE NEXT GROUND OF APPEAL IS WITH REGARD TO DISA LLOWANCE OF RS.68,99,900 U/S 14A OF THE ACT. 7. SHRI P.M. VEERAMANI, THE LD.REPRESENTATIVE FOR T HE ASSESSEE SUBMITTED THAT THE ASSESSEE DURING THE YEAR UNDER C ONSIDERATION INVESTED IN THE SHARES OF SUBSIDIARY COMPANIES AND ASSOCIATE COMPANIES BESIDES INTRODUCTION IN THE CAPITAL ACCOUNT OF THE PARTNERS HIP FIRM. AS FAR AS THE PARTNERSHIP FIRM IS CONCERNED, THE ASSESSEE MAY NOT BE ENTITLED TO CLAIM ANY EXPENDITURE IN VIEW OF THE JUDGMENT OF THE KERA LA HIGH COURT IN CIT VS POPULAR VEHICLES & SERVICES LTD (2010) 325 ITR 523 (KER). HOWEVER, IN RESPECT OF INVESTMENT IN THE SUBSIDIARY COMPANIES A ND ASSOCIATE 5 ITA NO. 751-753/COCH/2013 COMPANIES, THE HIGH COURT HAD NO OCCASION TO CONSID ER THE SAME. THE LD.REPRESENTATIVE SUBMITTED THAT FOR THE ASSESSMENT YEAR 2006-07, THIS TRIBUNAL EXAMINED THE ISSUE AFTER CONSIDERING THE J UDGMENT OF THE KERALA HIGH COURT FOR THE ASSESSMENT YEAR 2004-05 IN ASSES SEES OWN CASE AND FOUND THAT THE MATTER NEEDS TO BE RE-EXAMINED BY TH E ASSESSING OFFICER. ACCORDINGLY, THE MATTER WAS REMANDED BACK TO THE FI LE OF THE ASSESSING OFFICER. THE LD.REPRESENTATIVE FURTHER SUBMITTED T HAT FOR THE YEAR UNDER CONSIDERATION, THE INVESTMENT MADE BY THE ASSESSEE WAS LESS THAN THE PROFIT OF THE YEAR. THEREFORE, THERE IS NO QUESTIO N OF ANY DISALLOWANCE. ACCORDING TO THE LD.REPRESENTATIVE, THE BORROWED FU NDS WERE NOT USED FOR MAKING INVESTMENTS IN THE SISTER CONCERNS AS ALSO I N THE ASSOCIATE CONCERNS. 8. ON THE CONTRARY, SMT. LATHA V KUMAR, THE LD.DR S UBMITTED THAT ON IDENTICAL CIRCUMSTANCES, THIS TRIBUNAL, FOR THE ASS ESSMENT YEAR 2006-07 FOUND THAT THE JUDGMENT OF THE KERALA HIGH COURT IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2004-05 IS IN RESPECT OF IN VESTMENTS MADE IN THE PARTNERSHIP FIRM. HOWEVER, IN RESPECT OF THE INVES TMENTS MADE IN THE COMPANIES, THE JUDGMENT OF THE KERALA HIGH COURT MA Y NOT BE APPLICABLE. THIS TRIBUNAL FOUND THAT THE MATTER NEEDS TO BE RE- EXAMINED WITH REGARD TO THE CLAIM OF THE ASSESSEE REGARDING THE AVAILABILIT Y OF THE OWN FUNDS AND THE COMMERCIAL EXPEDIENCY FOR MAKING THE INVESTMENT . 6 ITA NO. 751-753/COCH/2013 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. IDENTICA L FACT WAS CONSIDERED BY THIS TRIBUNAL WITH REGARD TO THE INVESTMENT MADE IN THE COMPANIES AND THE PARTNERSHIP FIRM. THE ASSESSEE SPECIFICALLY CLAIME D BEFORE THIS TRIBUNAL FOR THE ASSESSMENT YEAR 2006-07 THAT THE SURPLUS FUNDS WERE AVAILABLE FOR MAKING INVESTMENT AND THE JUDGMENT OF THE KERALA HI GH COURT IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2004-05 MAY NOT BE APPLICABLE TO THE INVESTMENTS MADE IN COMPANIES. T HIS TRIBUNAL EXAMINED THE ISSUE AND REMANDED BACK THE MATTER TO THE FILE OF THE CIT(A). SINCE THE FACTS ARE IDENTICAL, FOR THE SAKE OF CONSISTENC Y, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE CIT(A) HAS TO RECONSIDE R THE ISSUE ON THE BASIS OF THE CONTENTIONS RAISED BY THE ASSESSEE. A CCORDINGLY, THE ORDER OF THE CIT(A) IS SET ASIDE AND THE ISSUE OF DISALLOWAN CE U/S 14A IS REMANDED BACK TO THE FILE OF THE CIT(A). THE CIT(A) SHALL R ECONSIDER THE ISSUE IN LIGHT OF CONTENTIONS RAISED BY THE ASSESSEE AND THEREAFTE R DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW AFTER GIVING REASONAB LE OPPORTUNITY OF HEARING TO THE ASSESSEE. 10. NOW COMING TO THE APPEAL FILED BY THE ASSESSEE FOR ASSESSMENT YEARS 2006-07 AND 2007-08, THE FIRST COMMON GROUND IS AGAINST THE FRINGE BENEFIT TAX U/S 115WB OF THE ACT. 7 ITA NO. 751-753/COCH/2013 11. SHRI P.M. VEERAMANI, THE LD.REPRESENTTIVE FOR T HE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER HAS TAKEN THE EXPENDITURE INCURRED BY THE ASSESSEE ON THE TELEPHONES INSTALLED AT THE OFF ICE AS FRINGE BENEFIT. ACCORDING TO THE LD.REPRESENTATIVE, TELEPHONES INST ALLED IN THE OFFICE ARE ONLY FOR THE PURPOSE OF BUSINESS AND NOT FOR THE BE NEFIT OF THE EMPLOYEES. THEREFORE, EXPENDITURE INCURRED BY THE ASSESSEE FOR THE PURPOSE OF BUSINESS CANNOT BE TREATED AS FRINGE BENEFIT U/S 11 5WB OF THE ACT. THE LD.REPRESENTATIVE PLACED HIS RELIANCE ON THE DECISI ON OF THE PUNE BENCH OF THIS TRIBUNAL IN INTERVALVE (INDIA) LTD VS ADDL CIT (2012) 77 DTR (PUNE)(TRIB) 113. THE LD.REPRESENTATIVE HAS ALSO F ILED THE DETAILS OF THE TELEPHONE EXPENDITURE WHICH WAS INSTALLED IN THE OF FICE PREMISES AS WELL AS THE TELEPHONE CHARGES INCURRED FOR THE BENEFIT OF T HE EMPLOYEES. ACCORDING TO THE LD.REPRESENTATIVE, IN RESPECT OF T ELEPHONES INSTALLED AT THE RESIDENCE OF THE EMPLOYEES CAN BE CONSIDERED FOR TH E PURPOSE COMPUTATION OF FRINGE BENEFIT; HOWEVER, IN RESPECT OF TELEPHONES INSTALLED AT THE OFFICE PREMISES FOR THE PURPOSE OF BUSINESS CAN NOT BE TREATED AS FRINGE BENEFIT. THEREFORE, THE ASSESSING OFFICER IS NOT C ORRECT IN DISALLOWING THE SAME. 12. ON THE CONTRARY, SMT. LATHA V KUMAR, THE LD.DR SUBMITTED THAT U/S 115WB(2)(J) USE OF TELEPHONE OTHER THAN LEASED TELE PHONE SHALL BE TREATED 8 ITA NO. 751-753/COCH/2013 AS FRINGE BENEFIT. IN THIS CASE, ACCORDING TO THE LD.DR, IT IS NOT THE CASE OF THE ASSESSEE THAT THE EXPENSES CLAIMED ARE IN RESPE CT OF LEASED TELEPHONE LINES. THE DEEMING PROVISION, ACCORDING TO THE LD. DR, HAS TO BE APPLIED FOR THE PURPOSE OF DISALLOWING THE CLAIM OF THE ASSESSE E WITH REGARD TO TELEPHONE EXPENSES OTHER THAN LEASED TELEPHONES. 13. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. FRINGE B ENEFIT EXPENDITURE DEFINED IN SECTION 115WB OF THE ACT READS AS FOLLOW S: 115WB.(1) FOR THE PURPOSES OF THIS CHAPTER, FRING E BENEFITS MEANS ANY CONSIDERATION FOR EMPLOYMENT PROVIDED BY WAY OF (A) TO (D) (II) XXXXXXXXXXXXXXXXXXXXXXXX (2) THE FRINGE BENEFITS SHALL BE DEEMED TO HAVE BEE N PROVIDED BY THE EMPLOYER TO HIS EMPLOYEES, IF THE EMPLOYER H AS, IN THE COURSE OF HIS BUSINESS OR PROFESSION (INCLUDING ANY ACTIVITY WHETHER OR NOT SUCH ACTIVITY IS CARRIED ON WITH THE OBJECT OF DERIVING INCOME, PROFITS OR GAINS) INCURRED ANY EXP ENSE ON, OR MADE ANY PAYMENT FOR, THE FOLLOWING PURPOSES, NAMEL Y:- (A) TO (I) XXXXXXXXXXXXXXXXXXXXXXXXXXXXX 9 ITA NO. 751-753/COCH/2013 (J) USE OF TELEPHONE (INCLUDING MOBILE PHONE) OTHER THAN EXPENDITURE ON LEASED TELEPHONE LINES; (K) TO (Q) XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX (3) XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX 14. IN VIEW OF THE ABOVE DEFINITION, ANY PRIVILEGE, SERVICE, FACILITY OR AMENITY PROVIDED BY THE EMPLOYER TO THE EMPLOYEE EI THER DIRECTLY OR INDIRECTLY SHALL BE CONSIDERED AS FRINGE BENEFIT. IN THIS CASE, THE ASSESSEE CLAIMS THAT THE TELEPHONE LINES ARE INSTALLED IN TH E OFFICE PREMISES FOR THE PURPOSE OF BUSINESS. THE ASSESSEE ALSO CLAIMS THAT THE TELEPHONE LINES PROVIDED TO THE EMPLOYEES AT THEIR RESIDENCE INCLUD ING THE MOBILE PHONE WAS NOT CLAIMED AS DEDUCTION AND IT WAS TAKEN AS FR INGE BENEFIT. THE ASSESSEE CLAIMS THAT THE ASSESSEE ONLY SEEKS DEDUCT ION OF THE EXPENDITURE FROM THE COMPUTATION OF FRINGE BENEFITS ON THE TELEPHONES INSTALLED IN THE BUSINESS PREMISES. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT WHEN THE TELEPHONE IS INSTALLED IN THE BUSINESS PREMISES OF THE ASSESSEE FOR THE BUSINESS PURPOSE IT CANNOT BE CONS IDERED AS A PRIVILEGE, SERVICE, FACILITY OR AMENITY TO THE EMPLOYEE. IT I S A FACILITY FOR THE PURPOSE OF CARRYING ON THE BUSINESS OF THE ASSESSEE. THERE FORE, THAT IS A BUSINESS EXPENDITURE. THIS TRIBUNAL IS OF THE CONSIDERED OP INION THAT THE EXPENDITURE INCURRED BY THE ASSESSEE IN RESPECT OF TELEPHONE INSTALLED IN THE OFFICE PREMISES FOR THE PURPOSES OF CARRYING OU T THE BUSINESS ACTIVITY 10 ITA NO. 751-753/COCH/2013 CANNOT BE CONSIDERED AS A FRINGE BENEFIT U/S 115WB OF THE ACT. HOWEVER, THE MATTER NEEDS TO BE VERIFIED, WHETHER THE TELEPH ONE INSTALLED IN THE PREMISES OF BUSINESS. IF THE TELEPHONE IS INSTALLE D AT THE RESIDENCE OF THE EMPLOYEE, THEN IT SHALL BE TAKEN AS FRINGE BENEFIT. THE ASSESSEE HAS TO FILE THE DETAILS OF EXPENDITURE WITH REGARD TO THE TELEP HONES WHICH WERE INSTALLED FOR THE BENEFIT OF THE EMPLOYEE AND IN RE SPECT OF THE TELEPHONES WHICH WERE INSTALLED IN THE OFFICE PREMISES. SINCE THE DETAILS ARE FILED BEFORE THIS TRIBUNAL, THE MATTER NEEDS TO BE EXAMIN ED BY THE ASSESSING OFFICER. ACCORDINGLY, THE ORDERS OF LOWER AUTHORIT Y ARE SET ASIDE AND THE ISSUE IS REMANDED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL RE-EXAMINE AND FIND OUT THE PLACE WHE RE THE TELEPHONES WERE INSTALLED AND THE PURPOSE FOR WHICH THEY WERE INSTA LLED AND THEREAFTER DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW AFTE R GIVING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. 15. THE NEXT COMMON ISSUE ARISES FOR CONSIDERATION IS IN RESPECT OF DEMO CAR. 16. SHRI P.M. VEERAMANI, THE LD.REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE WAS USING THE DEMO CARS FOR TEST DRIVE BY THE POTENTIAL CUSTOMERS. THESE DEMO CARS WERE TAKEN TO THE FIXED ASSETS IN THE BOOKS OF ACCOUNT AND DEPRECIATION WAS ALSO CLAI MED ON THE SAME. 11 ITA NO. 751-753/COCH/2013 ACCORDING TO THE LD.REPRESENTATIVE, THESE ARE NOT B ENEFITS PROVIDED TO THE EMPLOYEE IN CONSIDERATION OF THEIR EMPLOYMENT. ACC ORDING TO THE LD.REPRESENTATIVE, THE DEMO CARS ARE USED ONLY FOR THE PURPOSE OF BUSINESS. THEREFORE, LEVY OF FRINGE BENEFIT TAX ON THE DEPREC IATION AND ON THE VALUE OF THE VEHICLES ARE NOT JUSTIFIED. 17. ON THE CONTRARY, SMT. LATHA V KUMAR, THE LD.DR SUBMITTED THAT THE ASSESSEE HAS VEHICLES FOR THE BENEFIT OF THE EMPLOY EES AND ALSO FOR THE PURPOSE OF DEMONSTRATION. HOWEVER, NO DISTINCTION WAS MADE IN RESPECT OF CARS USED FOR DEMONSTRATION AND IN RESPECT OF CARS WHICH WERE USED FOR THE BENEFIT OF THE EMPLOYEES. IN THE ABSENCE OF ANY DI STINCTION IN RESPECT OF THE EXPENDITURE ON DEMO CARS AND THE CARS USED BY T HE EMPLOYEES, THE ASSESSING OFFICER DISALLOWED 20% OF THE EXPENSES AS FRINGE BENEFIT VALUE. ACCORDING TO THE LD.REPRESENTATIVE, THE CIT(A) HAS RIGHTLY CONFIRMED THE DISALLOWANCE. 18. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE EXCL USION OF DEPRECIATION AND THE VALUE OF THE CAR FROM THE COMPUTATION OF FR INGE BENEFIT IS AVAILABLE ONLY FOR THE CARS USED FOR TEST DRIVE BY THE POTENT IAL CUSTOMERS. THE REVENUE CLAIMED THAT APART FROM THE CAR THAT IS USE D FOR TEST DRIVE, THE ASSESSEE IS ALSO MAINTAINING VEHICLE FOR THE BENEFI TS OF THE EMPLOYEES. 12 ITA NO. 751-753/COCH/2013 HOWEVER, THE ASSESSEE HAS NOT FURNISHED ANY DETAILS WITH REGARD TO THE DETAILS OF THE CARS MEANT FOR THE BENEFIT OF THE EM PLOYEES. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE CAR MEANT FOR TH E BENEFIT OF THE EMPLOYEES HAS TO BE TREATED AS FRINGE BENEFIT. HOW EVER, IN RESPECT OF CARS WHICH WERE USED FOR TEST DRIVE BY POTENTIAL CUSTOME RS HAVE TO BE TREATED AS VEHICLE FOR BUSINESS. THE ASSESSING OFFICER DISALL OWED THE CLAIM OF THE ASSESSEE ONLY ON THE GROUND THAT THERE IS NO DISTIN CTION MADE BY THE ASSESSEE IN RESPECT OF EXPENDITURE MADE ON THE CARS MEANT FOR EMPLOYEES AS WELL AS THE CARS MEANT FOR TEST DRIVE THE ASSESS EE IS MAINTAINING CARS FOR TEST DRIVE AND FOR EMPLOYEES IT IS FOR THE ASSE SSEE TO SEGREGATE THE EXPENDITURE MADE ON EACH VEHICLE. IN THE ABSENCE O F ANY DETAILS BEFORE THIS TRIBUNAL, THIS TRIBUNAL IS OF THE CONSIDERED O PINION THAT THE MATTER NEEDS TO BE CONSIDERED AFRESH BY THE ASSESSING OFFI CER. ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE AND T HE ISSUE IS RESTORED ON THE FILE OF THE ASSESSING OFFICER. THE ASSESSING O FFICER SHALL RECONSIDER THE ISSUE IN THE LIGHT OF MATERIAL THAT MAY BE FILED BY THE ASSESSEE AND THEREAFTER FIND OUT WHETHER ANY FACILITY PROVIDED B Y THE ASSESSEE TO THE EMPLOYEES IN THE COURSE OF THEIR EMPLOYMENT OR NOT, AND THEREAFTER DECIDE THE ISSUE IN ACCORDANCE WITH LAW AFTER GIVING REASO NABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. 13 ITA NO. 751-753/COCH/2013 19. IN THE RESULT, APPEAL IN ITA NO.751/COCH/2013 I S PARTLY ALLOWED AND THE APPEALS IN ITA NOS 752 AND 753/COCH/2013 ARE AL LOWED, FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 06 TH JUNE, 2014. SD/- SD/- (B.R. BASKARAN) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 06 TH JUNE, 2014 PK/- COPY TO: 1. POPULAR VEHICLES & SERVICES LTD, KUTTUKARAN CENT RE, MAMANGALAM, KOCHI-25 2. THE DY.CIT, CENT.CIR.1(3), ERNAKULAM 3. THE COMMISSIONER OF INCOME-TAX, KOCHI 4. THE COMMISSIONER OF INCOME-TAX(A)-II, KOCHI 5. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, COCHIN BENCH