DCIT (LTU), Bangalore v. M/s. Hewlett Packard India Sales P. Ltd, Bangalore

ITA 1230/BANG/2010 | 2007-2008
Pronouncement Date: 29-07-2011 | Result: Dismissed

Appeal Details

RSA Number 123021114 RSA 2010
Bench Bangalore
Appeal Number ITA 1230/BANG/2010
Duration Of Justice 8 month(s) 17 day(s)
Appellant DCIT (LTU), Bangalore
Respondent M/s. Hewlett Packard India Sales P. Ltd, Bangalore
Appeal Type Income Tax Appeal
Pronouncement Date 29-07-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 29-07-2011
Assessment Year 2007-2008
Appeal Filed On 11-11-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH B BEFORE SMT. P MADHAVI DEVI JUDICIAL MEMBER AND SHRI A MOHAN ALANKAMONY ACCOUNTANT MEMBER ITA NO. 1230/BANG/2010 (ASST. YEARS 2007-08) THE DY. COMMISSIONER OF INCOME-TAX LTU BANGALORE. . APPELLANT VS. M/S HEWLETT PACKARD INDIA SALES PVT. LTD. 24 SALARPURIA ARENA HOSUR MAIN ROAD ADUGODI BANGALORE-560 030. . RESPONDENTS APPELLANT BY : SMT. ARCHANA CHOWDHRY RESPONDENT BY : SHRI PRADHAN DASS O R D E R PER SMT. P MADHAVI DEVI JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE. THE RELEV ANT ASSESSMENT YEAR IS 2007-08. THE APPEAL IS DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME-TAX (LTU) AT BANGALORE DATE D 16.09.2010. THE APPEAL ARISES OUT OF THE ASSESSMENT COMPLETED U /S 115WE(3) OF THE INCOME-TAX ACT 1961. ITA NO.1230/B/10 2 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL. I. THE LEARNED CIT(A) DID NOT APPRECIATE THAT THE JUDGMENT OF THE HONBLE ITAT FROM THE POINT OF VIEW OF THE PROVISIONS RELATING TO FRINGE BENEFIT TAX. II. THE LEARNED CIT(A) DID NOT APPRECIATE THAT THE JUDGMENTS RELIED UPON BY THE HONBLE ITAT IN ASSESSEES CASE FOR THE ASSESSMENT YEAR 2006-07 WERE RENDERED IN ENTIRELY A DIFFERENT CONTEXT AND THEREFORE THE LIABILITY FOR FRINGE BENE FIT CANNOT BE BROUGHT ON THE SAME PLANE AS ANY OTHER BUSINESS EXPENDITURE. III. THE LEARNED CIT(A) DID NOT APPRECIATE THAT THE SPECIFIC ISSUE IN DISPUTE HAD BEEN CONSIDERED AND ANSWERED BY THE CBDT IN ITS CIRCULAR NO.08 OF 2005 DATED 29.8.2005. IV. THE LAW RELATING TO FBT BEING OF RECENT ORIGIN THE INTERPRETATION OF THE SAME AS CLARIFIED BY THE CBDT SHOULD HAVE BEEN CONSIDERED. V. THE LEARNED CIT(A) DID NOT CONSIDER THE RATIO LAID DOWN BY THE APEX COURT IN 301 ITR 309 ITA NO.1230/B/10 3 AND 131 ITR 597 AND ALSO BY THE JURISDICTIONAL HIGH COURT IN 87 ITR 511. VI. THE LEARNED CIT(A) DID NOT APPRECIATE THE FACT THAT THE CIRCULAR ISSUED BY THE CBDT DID NOT VIOLATE PROVISION OF ANY LAW OR JUDGMENT RENDERED BY ANY COURT AND THEREFORE AS HELD BY THE HONBLE SUPREME COURT IN 301 ITR 309 THE CIRCULAR WILL HAVE A BINDING FORCE 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E COMPANY HAD FILED A RETURN OF FRINGE BENEFITS U/S 115WE(1) OF T HE ACT. DURING THE ASSESSMENT PROCEEDINGS U/S 115WE(2) OF THE ACT THE AO HELD THAT THE RENT PAID FOR CAR PARKING AREA IS ALSO LIABLE TO FR INGE BENEFIT TAX BY RELYING UPON THE CBDT CIRCULAR NO.8 OF 2005 DATED 2 9.08.2005. 4. AGGRIEVED ASSESSEE PREFERRED AN APPEAL BEFORE T HE CIT(A) WHO ALLOWED THE SAME BY FOLLOWING THE ORDER OF THE ITAT IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2006-07 WHEREIN I T WAS HELD THAT CAR PARKING WAS A FUNCTIONAL PART OF ASSESSEES WOR KING AREA AND THEREFORE IT WAS NOT POSSIBLE TO TREAT THE CAR PAR KING SLOTS AS SOMETHING DISTINCT AND DIFFERENT FROM THE PROPERTY RENTED BY THE ITA NO.1230/B/10 4 ASSESSEE FOR HOUSING ITS BUSINESS ACTIVITIES. AGGR IEVED BY THIS ORDER REVENUE IS IN APPEAL BEFORE US. 5. ON HEARING BOTH THE PARTIES AND AFTER CONSIDERIN G THE RELEVANT MATERIALS ON RECORD WE FIND THAT THE ISSUE IS COVE RED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE ITAT IN THE ASSESSE ES OWN CASE FOR THE EARLIER YEARS AND THE CIT(A) HAS ONLY FOLLOWED THE SAID DECISION IN ALLOWING THE ASSESSEES APPEAL. ITAT HAD ALSO CONS IDERED THE CBDT CIRCULAR REFERRED TO IN THE GROUNDS OF APPEAL AND A FTER CONSIDERING THE DECISIONS OF HIGH COURTS AND THE APEX COURT ONLY HA S HELD IN FAVOUR OF THE ASSESSEE. SINCE THE ORDER OF THE CIT(A) IS I N CONSONANCE WITH THE DECISION OF THE ITAT WE DO NOT SEE ANY REASON TO INTERFERE WITH THE SAME. 6. IN THE RESULT THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29TH JUL 2011. SD/- SD/- (A MOHAN ALANKAMONY) (P MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER VMS. BANGALORE DATED : 29/07/2011 ITA NO.1230/B/10 5 COPY TO : 1. THE ASSESSEE 2. THE REVENUE 3.THE CIT CONCERNED. 4.THE CIT(A) CONCERNED. 5.DR 6.GF BY ORDER ASST. REGISTRAR I TAT BANGALORE.