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Income Tax Appellate Tribunal, KOLKATA ‘D’ BENCH, KOLKATA
Before: Sri J. Sudhakar Reddy & Sri S. S. Viswanethra Ravi]
D.C.I.T. Circle-7(1), Kolkata.…...……….……………………………………………….…….……...Appellant P-7, Chowringee Square 5th Floor Room No. 15 Kolkata – 700 069 [PAN : AABCB 2115 P] M/s. Business Standard Ltd…………….………………………………..……………………..…. Respondent 4/1, Red Cross Place Saraf Building 3rd Floor Kolkata – 700 001 Appearances by: Shri Madhur Agarwal, Advocate, appeared on behalf of the assessee. Shri Arindam Bhattacharjee, Addl. CIT, DR appearing on behalf of the Revenue. Date of concluding the hearing : December 19th, 2017 Date of pronouncing the order : January 05th , 2018
O R D E R Per J. Sudhakar Reddy :-
This appeal filed by the revenue is directed against the order of the ld. Commissioner of Income Tax (Appeals)-15, Kolkata, (hereinafter the ‘ld. CIT (A)’), passed u/s 250 of the Income Tax Act, 1961 (the ‘Act’), dt. 15/02/2016, for the Assessment Year 2006-07.
The Assessing Officer passed an order u/s 115WE(3) r.w.s. 115WE(2) of the Act, on 31/12/2008, and determined the total value of fringe benefits at Rs.84,99,992/-, as against the fringe benefits of Rs.34,48,446/-, determined by the assessee and accepted by the Assessing Officer in the original assessment proceedings. The assessee objected to the re-opening of the assessment without success.
On appeal the ld. First Appellate Authority, upheld the re-opening of the assessment. On merits, he granted part relief.
Assessment Year: 2006-07 M/s. Business Standard Ltd 4. Aggrieved the revenue is in appeal before us on the following grounds:-
“1. That on the facts and in the circumstances of the case, the ld. CIT(A) has erred in law as well as in fats for allowing expenses of the employer under the head Telephone, Car Hire Charges, Journalist & Reporter-Travel Expenses, Business Promotion, Employee Welfare, Medical which would otherwise suffer consideration for provision of Fringe Benefit to his employee u/s 115WB(1) and 115WB(2) of the Act.
2. That the appellant craves leave to add, delete, alter, modify or take new grounds of appeal.”
We have heard, Shri Arindam Bhattacharjee, Additional CIT, on behalf of the Revenue and Shri Madhur Agarwal, Advocate, ld. Counsel for the assessee. On careful consideration of the papers on record, orders of the authorities below as well as the case-law cited, we hold as follows:-
5.1. The ld. CIT(A) deleted the addition of Landline Office Telephone expenses by following the decision of the Mumbai Bench of the Tribunal in the case of Dy. Commissioner of Income Tax vs. Kotak Mahindra Old Mutual Life Insurance Ltd. 134 ITD 288 (Mum), on the ground that this is not a fringe benefit. We find no infirmity in this decision as Office Telephone expenditure is only necessarily incurred for business/profession. Accordingly, we uphold the decision of the ld. CIT(A) on this issue.
The second issue is whether Conveyance and Travel Expenses of Rs.1,45,43,937/-, constitute fringe benefits. Here also the ld. CIT(A) followed the decision in the case of Kotak Mahindra Old Mutual Life Insurance Ltd. (supra) and held that the entire car hire charges were paid for business purposes and there was no persons use of cars and hence there is no fringe benefits as defined in the Act. Similarly, the journalists and reporters for whom travel expenses have been paid are not employees of the assessee and hence this amount cannot be brought into fringe benefit tax.
Assessment Year: 2006-07 M/s. Business Standard Ltd 6.1. Employee welfare expenses consisting of relocation expenses, shifting expenses were actual re-imbursements and hence cannot be included in the value of Fringe Benefit tax. 6.1.1. Similarly, business promotion expenses consisting of sponsorship of Golf Tournaments, Banners, T-Shirts and other promotional activities are wholly for the purpose of business and cannot be brought within the kin of FBT (fringe benefit tax). In our view, the ld. CIT(A) has rightly deleted the same.
6.1.2. Similarly, the actual expenses incurred by way of re-imbursement of medical expenses does not attract fringe benefit tax as held by the following case- law:- Godrej Properties Ltd. v. Addl. CIT (2011) 16 Taxmann.com 298 (Mum) Grindwell Norton Ltd. Vs. ACIT, Bosch Ltd. vs. DCIT (2011) 15 Taxmann. Com 187 (Bang) Intervalve India Ltd. ITA No. 1262/PN/10
Thus, we find no infirmity in the order of the ld. First Appellate Authority and uphold the same.
In the result, appeal of the revenue is dismissed.