JCIT, BANGALORE vs. M/S DELL INDIA PVT. LTD., BANGALORE

Brief facts of the case are that the assessee-company which is engaged in the business of manufacture and trading of M/s.Dell India Pvt. Ltd. Page 2 of 3 computer systems filed its return of income for assessment year 2009-10 on 30/9/2009 declaring a total value of fringe benefits of Rs.8,16,22,914/-. During the assessment proceedings u/s 115WE(3) of the Act, the AO observed that the assessee has claimed transportation charges of Rs.50,19,592/- to be exempt from fringe benefit tax. The AO, however, held it to be in the nature of conveyance which is taxable u/s 115WB(2)(f) of the Act as fringe benefit. He, therefore, brought 20% of such expenses i.e. Rs.10,03,980/- to tax. Aggrieved, the assessee preferred an appeal before the CIT(A) who deleted the disallowance and the revenue is in appeal before us against the relief given by the CIT(A).

At the time of hearing, the learned Departmental Representative supported the order of the AO while the learned counsel for the assessee placed reliance upon the order of the CIT(A). In addition to the above, the learned counsel for the assessee has also brought to our notice that the tax effect in this case is only Rs.3,01,175/- which is less than the monetary limit of Rs.4 lakhs fixed by the CBDT for filing of appeals before the Tribunal and is therefore liable to be dismissed as not maintainable. He placed reliance upon the decision of the Hon’ble Karnataka High Court in the case of CIT Vs. Ranka & Ranka (2012)(206 ITR 322; Hon’ble Bombay High Court in the case of CIT vs. Smt.Vijaya V.Kavekar (2013) 350 ITR 237 and Hon’ble Gujarat High Court in the case of CIT vs. Sureshchandra

Having regard to the rival contentions and the material on record, we find that the taxable value of the transportation charges with regard to fringe benefit is Rs.10,03,918/- and tax on the same at the rate of 30% is Rs.3,01,175/- which is less than the monetary limit of Rs.4 lakhs fixedby the CBDT. In view of the same, we dismiss the revenue’s appeal on account of low tax effect.