Case Law Details
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.
Therefore, we are of the opinion that the adjustment of impugned item as suggested by Ld. CIT was not legally tenable in law which leads us to inevitable conclusion that the omission to carry out the said adjustment did not result into any loss of revenue. Therefore, one of the prime condition viz. prejudicial to interest of revenue to invoke the revisional jurisdiction under the provisions of Section 263 has remained unfulfilled in the present case and therefore, the impugned order could not be sustained in law
FULL TEXT OF THE ITAT ORDER IS AS FOLLOWS:-
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