Rashtriya Chemicals & Fertilizers Limited Vs. CIT (ITAT Mumbai)
Taxes borne by the assessee on non-monetary perquisites provided to employees forms part of Employee Benefit cost and akin to Fringe Benefit Tax since they are certainly not below the line items since the same are expressively disallowed u/s 40(a)(v) and the same do not constitute Income Tax for the assessee in terms of Explanation-2. This view of ours is duly fortified by the judgment of Tribunal rendered in ITO Vs. Vintage Distillers Ltd. [130 TTJ 79] where the Tribunal has taken the view that the term ‘tax’ was much wider term than the term ‘Income Tax’ since the former, as per amended definition of ‘tax’ as provided in Section 2(43) included not only Income Tax but also Super Tax & Fringe Benefit Tax.
Therefore, without there being any corresponding amendment in the definition of Income Tax as provided in Explanation-2 to Section 115JB, Fringe Benefit Tax was not required to be added back while arriving at Book Profits u/s 115JB. Similar view has been expressed in another judgment of Tribunal titled as Reliance Industries Ltd Vs. ACIT [ITA No. 5769/M/2013 dated 16/09/2015] where the Tribunal took a view that ‘Wealth Tax’ did not form part of Income Tax and therefore, could not be added back to arrive at Book Profits since the adjustment thereof was not envisaged by the statutory provisions.
