Case Law Details
SICPA India Private Limited Vs ACIT (ITAT Delhi)
ITAT Delhi held that fringe benefit tax is an allowable deduction in computing book profit as per Section 115JB of the Income Tax Act.
Facts- The assessee filed return of income declaring income of Rs.17,65,38,023/- under normal provisions of the Act and book profit u/s. 115JB of Rs.56,41,92,385/-. The case was selected for scrutiny and assessment order came to be passed u/s. 143(3) of the Act.
AO disallowed the claim of provision of Fringe Benefit Tax. CIT(A) also disallowed the claim of Fringe Benefit Tax in computing book profits u/s. 115JB. Being aggrieved, the present appeal is filed.
Conclusion- Held that in computing the book profit u/s 115JB of the Act the assessee considered the net profit before tax as per audited financial statement and separately claimed deduction for fringe benefit tax of Rs. INR. 8,00,000/-. The A.O. held that the deduction for provision for fringe benefit tax is not allowable and the claim of the assessee is not in consonance with adjustment mentioned in Explanation 1 to Section 115JB of the Act. The assessee taken a specific plea before the CIT(A) regarding applicability of the CBDT vide Circular No. 8/2005 dated 29/08/2005, wherein it is clarified that fringe benefit tax is an allowable deduction in computing book profit as per Section 115JB of the Act.
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