ACIT Vs M/s Global Vantedge (P) Ltd. (ITAT Delhi)- Expenses incurred on use of telephone (including mobile phone) shall not include the expenditure on leased telephone lines. In other words, the expenditure on leased telephone lines has been excluded from the purview of Fringe benefits as provided in clause (J) of sub-section (2) of sec. 115 WB of the Act. In the present case, the assessee has incurred expenses on Telephone Link which are in the nature of expenses incurred on the leased telephone lines as so observed and held by the ld. CIT(A) in his order against which the ld. Departmental Representative has not made any comment except merely relying on the AO’s order. In this view of the matter, we, therefore, upheld the order of CIT(A) in deleting the addition of Rs. 26,56,792/- being 20% of total expenses incurred towards Telephone Link Expenses. The order of ld.
INCOME TAX APPELLATE TRIBUNAL, DELHI
ITA No. 775/Del/2011
Assessment Year: 2006-07
ACIT
Vs
M/s Global Vantedge (P) Ltd.,
ORDER
PER C.L. SETHI, J.M.
Delhi ITAT ruling on ACIT vs. M/s Global Vantedge – Exclusion of leased telephone lines from fringe benefits. Rs. 26,56,792 expense deleted.
The present appeal is filed by the revenue against the ld. CIT(A)’s order dated 22.11.2010 passed in the matter of an assessment made by the Assessing Officer u/s 115 WE(3) of the Income Tax Act, 1961 for the A.Y. 2006-07. The only ground raised by the revenue is directed against CIT(A)’s order in deleting the addition of Rs. 26,56,792/- made by the AO on account of telephone link expenses while determining the total amount of fringe benefit u/s 115WB of the Act.
2. The assessee filed Fringe benefit return on 30.11.2006 declaring value of Fringe benefits at Rs. 46,11,732/-. In the course of assessment proceedings, it was asked by the AO as to why the total expenditure under the head “telephone” (communication expenses) amounting to Rs. 6,73,93,740/- should not be treated as eligible for Fringe benefit tax as against sum of Rs. 46,07,979/- shown by the assessee. The details of total expenses of Rs. 6,73,93,740/- were furnished by the assessee as under: –
PARTICULARS AMOUNT (Rs.)
