Case Law Details
M/s. TCG Lifesciences Pvt. Ltd Vs ITO (ITAT Kolkata)
Learned counsel for the assessee has contended that the amount in question paid by the assessee company to its employees towards car running and maintenance expenses is not covered by the definition of ‘perquisite’ given in section 17(2) of the Income Tax Act, 1961. We are unable to accept this contention of the learned counsel for the assessee. As per Clause (viii) of sub-section (2) of section 17, perquisite includes the value of any other fringe benefit or amenity as may be prescribed. Such other fringe benefits or amenities as mentioned in Clause (viii) of sub-section (2) of section 17 are prescribed in rule 3 of Income Tax Rule, 1962 and even the method of valuation thereof is prescribed. The method of valuation of perquisite provided by way of use of motor car to an employee is given in sub-rule (2A) of rule 3 in tabular form and as per serial no 2 of the said table, where the employee owns a motor car but the actual running and maintenance charges are met and reimbursed to him by the employer, this perquisite will have no value if such reimbursement is for the use of vehicle wholly and exclusively for official purposes provided that the documents specified in Clause (B) of this sub-rule are maintained by the employer. As per Clause (B) of sub-rule (2) of rule 3, the employer has to maintain a complete detail of journey undertaken for official purpose which may include date of journey, destination, mileage and the amount of expenditure incurred thereon. Further, the employer has to give a certificate to the effect that expenditure was incurred wholly and exclusively for the performance of official duty.
In the present case, the requisite details as specified in Clause (B) of sub-rule 2 of rule 3 of Income Tax Rules 1962 were not maintained by the assessee and this being the undisputed position, we find ourselves in agreement with the authorities below that the value of perquisite provided by the assessee company to its employees in the form of reimbursement of car running and maintenance charges was chargeable to tax in their hands and the assessee was liable to deduct tax at source from the said value. Since there was failure on the part of the assessee company to deduct tax at source from the value of the said perquisite, we are of the view that it was rightly treated by the A.O. as the assessee in default for such non or short deduction of tax at source under section 201(1) and interest under section 201(1A) was also correctly charged in accordance with In that view of the matter, we uphold the impugned order passed by the Ld. CIT(A) confirming the orders of the A.O. passed under section 201(1)/201(1A) for both the years under consideration and dismiss these appeals of the assessee.
FULL TEXT OF THE ITAT JUDGMENT
These two appeals filed by the assessee are directed against the common order of Ld. CIT(A) – 24, Kolkata dated 04.03.20 16 whereby he upheld the orders passed by the Assessing Officer under section 201(1)/201(1A) of the Income Tax Act, 1961 treating the assessee as the assessee in default for A.Y. 2011-12 and 2012-13.
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