Case Law Details
Singareni Colleries Company Ltd Vs ACIT (ITAT Hyderabad)
AR of the assessee submitted that the amount of electricity provided to the employees is not a Fringe Benefit as this is a contractual obligation to the employees working in coal mines which is as per the National Coal Workers Agreement ( NCWA) and this benefit is provided to mitigate the occupational hazard in coal mining. He further submitted that Employee’s welfare U/s 115WB(E) does not include any expenditure in current or payment made to (1) fulfill any statutory obligation, or (2) mitigate occupational hazards according to the explanation given under sub-c1ause(e) of Sub-Section 2 of section 115WB of the Income Tax Act, 1961.
The ld. DR, on the other hand relied on the orders of revenue authorities and submitted that the expenditure incurred by the assessee by way of providing electricity to its employees at free of cost/concessional rate is not for fulfilling statutory obligation since the agreement between the management of the assessee company and the Coal Workers Association is not statutory and only a facility provided by the company to its employees.
On going through the agreement entered into between the representatives of Central Trade Unions with Hon’ble Minister of Coal & Mines and Secretary, Govt. of India, Department of Coal & Chairman, Coal India ltd. on 12th January, 2004, we find that the CBDT has not been recognized the said agreement and, therefore, this agreement cannot override the income-tax Act, which is enacted by the Parliament. The above agreement is not statutory and only a facility provided to the employees in a particular sector. In view of the above discussion, we do not find any infirmity in the orders of the CIT(A) in confirming the order of the AO wherein the AO has made an addition in the hands of the assessee towards Fringe benefit tax on account of expenditure pertaining to staff towards electricity consumption and upholding the orders of CIT(A) in all the appeals under consideration, we dismiss the grounds raised by the assessee in all the AYs under consideration.
FULL TEXT OF THE ORDER OF ITAT HYDERABAD
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