Emami Ltd. (since merged with J.B. Marketing & Finance Ltd.), Kolkata v. DCIT, Central Circle - VIII, Kolkata, Kolkata

ITA 1471/KOL/2010 | 2006-2007
Pronouncement Date: 28-01-2011

Appeal Details

RSA Number 147123514 RSA 2010
Assessee PAN AAACH7412G
Bench Kolkata
Appeal Number ITA 1471/KOL/2010
Duration Of Justice 6 month(s) 9 day(s)
Appellant Emami Ltd. (since merged with J.B. Marketing & Finance Ltd.), Kolkata
Respondent DCIT, Central Circle - VIII, Kolkata, Kolkata
Appeal Type Income Tax Appeal
Pronouncement Date 28-01-2011
Appeal Filed By Assessee
Bench Allotted B
Tribunal Order Date 28-01-2011
Assessment Year 2006-2007
Appeal Filed On 19-07-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL BEN CH B KOLKATA () BEFORE . .. . . .. . SHRI B.R.MITTAL JUDICIAL MEMBER. /AND . .. .!' !'!' !'. .. . #$ SHRI C.D.RAO ACCOUNTANT MEMBER % % % % / ITA NO . 1471/KOL/2010 &' ()/ ASSESSMENT YEAR : 2006-07 (+ / APPELLANT ) EMAMI LTD. (SINCE MERGED WITH J.B.MARKETING & FINANCE LTD.) (PAN: AAACH 7412 G) - & - - VERSUS - . (./+ / RESPONDENT ) THE D.C.I.T. CENTRAL CIRCLE-VIII KOLKATA + 0 1 #/ FOR THE APPELLANT: SHRI DEV KUMAR KOTHARI ./+ 0 1 #/ FOR THE RESPONDENT: SHRI K.K.TRIPATHI #2 / ORDER ( (( ( . .. .!' !'!' !'. .. . ) )) ) #$ PER SHRI C.D.RAO AM THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE O RDER DATED 28.04.2010 OF THE CIT(A)-CENTRAL-I KOLKATA PERTAINING TO A.YR. 2006- 07. 2. IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOL LOWING GROUNDS OF APPEAL :- 1. LEARNED CIT(A) WAS WRONG IN (A) HOLDING THAT TH ERE WAS NO REASONABLE CAUSE FOR DELAY IN FILING OF THE APPEAL AND (B) IN DISMISSING THE APPEAL. 2. LEARNED CIT(A) WAS WRONG IN IGNORING THE FACT TH AT THE ASSESSEE HAS OBJECTED TO THE VALUE OF TAXABLE FRINGE BENEFITS AS SESSED AND CLAIMED RELIEF IN APPEAL MEMO AS FOLLOWS : DIRECTIONS FOR PROPER ASSESSMENT OF FRINGE BENEFIT S THEIR VALUATION TAX LEVIABLE AND REFUND OF EXCESS TAX PAID WITH UP TO D ATE INTEREST. 3. LEARNED CIT(A) WAS WRONG IN HOLDING THAT THE APP EAL WAS NOT MAINTAINABLE U/S 246A(AA) BECAUSE THE VALUATION OF FRINGE BENEFI TS AS PER RETURN WAS ACCEPTED BY THE AO WITHOUT MAKING ANY VARIATION. 2 4. LEARNED CIT(A) WAS WRONG IN NOT AT ALL CONSIDERI NG THE JUDGEMENTS IN CASE OF MADHU JAYANTI (P) LTD. V CIT 154 ITR 277 (CAL) REFERRED TO BY THE ASSESSEE ABOUT ADMISSIBILITY OF CLAIM FOR THE FIRST TIME BEF ORE THE CIT(A). 5. LEARNED CIT(A) WAS ALSO WRONG IN NOT AT ALL CONS IDERING THE JUDGEMENT IN CASE OF S.A.L.NARAYANA ROW CIT BOMBAY CITY AND AN OTHER VERSUS MODEL MILLS NAGPUR LIMITED [1967] 64 ITR 67 (SC) RELIED O N BY ASSESSEE ABOUT REFUND OF EXCESSIVE TAX PAID UNDER MISTAKE OF LAW. 6. LEARNED CIT(A) WAS WRONG IN NOT PROPERLY APPLYIN G LAW LAID DOWN IN JUTE CORPN OF INDIA LTD. V. CIT [1991] 187 ITR 688 (SC) AND NATIONAL THERMAL POWER CO. LTD. V. CIT [1998] 229 ITR 383 (SC) RELIE D ON BY ASSESEE ABOUT CONSIDERATION OF CLAIMS OF ASSESSEE FOR THE FIRST T IME. 7. FOR THAT LEARNED CIT(A) MAY BE DIRECTED TO CONDO NE THE DELAY IN FILING OF THE APPEAL AND ADMIT THE APPEAL AND DECIDE THE SAME ON MERIT AFTER ALLOWING FURTHER OPPORTUNITY OF HEARING TO THE ASSESSEE. 8. FOR THAT ALTERNATIVELY TO EXPEDITE THE PROCESS OF PROPER ASSESSMENT OF TAX AND TO EXPEDITE JUSTICE LEARNED AO MAY BE DIRECTED TO EXCLUDE FROM VALUATION OF TAXABLE FRINGE BENEFITS THE FOLLOWING AMOUNTS WH ICH WERE UNDER MISTAKE OF LAW INCLUDING IN VALUATION BY ASSESSEE AND ASSESSED BY THE AO : A. OUT OF ADVERTISEMENTS AND SALES PROMOTIONS EXPE NSES ON ACCOUNT OF PAYMENT MADE TO MODELS ACTORS SPORTS PERSONS AND OTHER CELEBRITIES AMOUNTING TO RS.77 71 492/- AND FREE SAMPLES RS.110 669/- CONFERENCES AND SALES PROMOTION CONFERENCE EXPENSES RS.360027/-. B. OUT OF EMPLOYEES WELFARE EXPENSES 20% OF MEDI CAL INSURANCE PREMIUM AND OVERSEAS MEDICAL INSURANCE PREMIUM RS.13416/- C. ON ACCOUNT OF TOUR AND TRAVEL EXPENSES RS.28 89 217/- BY TAKING 5% OF SUCH EXPENSES AS TAXABLE INSTEAD OF 20%. 9. FOR THE LEARNED AO MAY BE DIRECTED TO PROPERLY COMPUTE VALUE OF FRINGE BENEFITS TAX THEREON AND TO REFUND EXCESSIVE TAX P AID UNDER MISTAKE OF LAW TOGETHER WITH INTEREST UNDER SECTION 244A. 3. THE BRIEF FACTS OF THIS ISSUE ARE THAT THE AO H AS COMPLETED ASSESSMENT U/S 115WE(3) OF THE IT ACT BY OBSERVING AS UNDER :- THE RETURN OF INCOME WAS FILED ON 29.11.2006 SHOWI NG TOTAL FRINGE BENEFIT OF RS.1 54 53 271/-. IN RESPONSE TO NOTICE /S 115WE(2) SHRI JAYANTA CHATTERJEE A/R OF THE ASSESSEE APPEARED FROM TIME TO TIME AND EXPLAINED THE RETURN WITH REFERENCE TO THE DETAILS FILED BY HIM. THE CASE WAS DISCUSSED. 3.1. LATER ON THE ASSESSEE FILED APPEAL BEFORE THE LD. CIT(A) BY TAKING THE FOLLOWING GROUNDS :- 1. FOR THAT LEARNED AO MAY BE DIRECTED TO CONSIDER SUBSEQUENT CLARIFICATIONS BY WAY OF CIRCULARS AND ALSO AMENDMENTS IN LAW REL ATING TO FBT REDUCING VALUATION AND SCOPE OF TAXABLE FRINGE BENEFITS AS C LARIFICATORY AND CURATIVE AMENDMENTS SO APPLICABLE SINCE INCEPTION OF FBT BEC AUSE FBT PROVISIONS WERE NEW AND IN THEIR INITIAL STAGE OF IMPLEMENTATI ON THE AMENDMENTS ARE TO 3 REDUCE HARDSHIP IRRATIONALITY AND TO MAKE THEM CON FIRMING TO LEGISLATIVE INTENTIONS. 2. FOR THAT IN PARTICULAR LEARNED AO MAY BE DIRECT ED TO EXCLUDE FORM TAXABLE FRINGE BENEFITS AND/OR REDUCE VALUE OF FRINGE BENEF ITS THE FOLLOWING : A. TO REDUCE VALUATION OF FRINGE BENEFITS IN ACCORD ANCE WITH BOARDS CIRCULAR AND SUBSEQUENT AMENDMENT IN RELATION OF ADVERTISEME NT PUBLICITY SALES PROMOTION CONFERENCE GUEST HOUSE EMPLOYEES WELFA RE ETC. B. TO EXCLUDE VALUE OF FRINGE BENEFITS ON ACCOUNT OF EXPENSES OF TEMPORARY ACCOMMODATION FOODS MAINTENANCE OF ACCOMMODATION ETC. WHICH ARE IN NATURE OF GUEST HOUSE EXPENSES. C. TO EXCLUDE EXPENSES HAVING NO CONNECTION WITH E MPLOYEES OF ASSESSEE. 3. FOR THAT LEARNED A.O. MAY BE DIRECTED TO REFUN D EXCESSIVE TAX PAID UNDER MISTAKE OF LAW. 4. FOR THAT LEARNED AO MAY BE DIRECTED TO PAY IN TEREST ON REFUND CORRECTLY AND UP TO DATE OF REFUND. 5. FOR THAT THE APPELLANT SEEK KIND PERMISSION T O RAISE NEW CONTENTIONS AND NEW GROUNDS OF APPEAL. 3.2. WHILE ADJUDICATING THE ABOVE GROUNDS THE LD. C IT(A) CONFIRMED THE ACTION OF THE AO BY OBSERVING AS UNDER :- THE LD. AR HAS STATED THAT EXCESS TAX HAS BEEN CAL CULATED AND PAID BY THE COMPANY. IT HAS BEEN FURTHER STATED THAT THE APPELL ATE AUTHORITY HAS POWER TO CONSIDER ADDITIONAL GROUNDS TAKEN BY THE APPELLANT. RELIANCE HAS BEEN PLACED ON JUTE CORP OF INDIA V CIT 187 ITR 688 (SC) AND NA TIONAL THERMAL POWER CO LTD. V CIT 229 ITR 383 (SC). I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE L D. AR. FIRST OF ALL THE ASSESSEE HAS FAILED TO EXPLAIN THAT THERE WAS REASO NABLE CAUSE FOR 7 MONTHS DELAY IN FILING APPEAL. IT IS NOT A CASE OF A NEW A SSESSEE THAT THE JURISDICTION OF THE CIT(A) WAS NOT KNOWN AND IT TOOK SUCH A LONG TI ME TO CLARIFY FROM THE AO. FURTHER IN THE CASE UNDER CONSIDERATION THE RETURN FILED BY THE ASSESSEE HAS BEEN ACCEPTED BY THE AO WITHOUT MAKING ANY VARIATION HE NCE THE ORDER IN QUESTION CANNOT BE A APPEALABLE ORDER UNDER SECTION 246A (AA ) OF THE ACT. FURTHER THE RATIO OF THE APEX COURT CITED BY THE APPELLANT IS NOR APPLICABLE AS THE FACT OF THE CASE IS NOT COMPARABLE. THE APPELLATE AUTHORITY CAN CONSIDERED ADDITIONAL GROUNDS/CLAIMS BUT NOT IN ABSENCE OF ANY ORIGINAL G ROUNDS/CLAIMS. HENCE CONSIDERING ABOVE FACT DISCUSSED ABOVE THE APPEAL FILED BY THE APPELLANT IS DISMISSED. 3.3. AGGRIEVED BY THIS NOW THE ASSESSEE IS IN APPEA L BEFORE US BY TAKING THE ABOVE GROUNDS. 4. AT THE TIME OF HEARING BEFORE US THE LD. AR HAS REITERATED THE GROUNDS TAKEN BEFORE THE TRIBUNAL AND CONTENDED THAT THE DUTY OF THE ASSESSING OFFICER IS TO ASSESS REAL AND CORRECT INCOME IN ACCORDANCE WITH LAW. THE CBDT IN ITS CIRCULAR 4 NO.14(XL35) OF 1955 DATED 11.04.1955 STATED THAT OF FICERS OF THE DEPARTMENT MUST NOT TAKE ADVANTAGES OF IGNORANCE OF AN ASSESSEE AS TO HIS RIGHTS IT IS ONE OF THEIR DUTIES TO ASSIST A TAX PAYER IN EVERY REASONABLE WAY. FOR THIS PROPOSITION HE RELIED ON THE TRIBUNALS DECISION IN THE CASE OF OASIS SECURITIES LTD. [2010] 1 TAXMANN.COM 97 (MUM-ITAT) IN ORDER DATED JANUARY 29 2010. THEREFO RE HE REQUESTED TO SET ASIDE THE MATTER TO THE FILE OF THE AO TO RECOMPUTE THE FRING E BENEFIT TAX. 5. ON THE OTHER HAND THE LD. DR HEAVILY RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES AND FURTHER CONTENDED THAT THE ASSESSEE HIMSELF IS NOT ABLE TO CALCULATE THE EXACT FRINGE BENEFIT TAX PAYABLE BY THE ASSESSEE CO MPANY. IN THE ABSENCE OF SUCH DETAILS IT IS VERY DIFFICULT ON THE PART OF THE AO TO RE-COMPUTE FRINGE BENEFIT TAX AND THE LD. CIT(A) IS RIGHT IN CONFIRMING THE ACTION OF THE AO IN THE ABSENCE OF SUCH DETAILS. FURTHER HE REQUESTED TO UPHOLD THE ACTION OF THE REVENUE AUTHORITIES. 6. AFTER HEARING THE RIVAL SUBMISSIONS AND ON CAREF UL PERUSAL OF THE ASSESSMENT ORDER GROUNDS OF APPEAL TAKEN BY THE ASSESSEE BEFO RE THE LD. CIT(A) AND THE LD. CIT(A)S ORDER AND THE GROUNDS TAKEN BY THE ASSESSE E BEFORE THE TRIBUNAL IT IS OBSERVED THAT THE ASSESSEE THOUGH CONTENDED THAT TH E DUTY OF THE AO IS TO ASSESS THE REAL AND CORRECT INCOME IN ACCORDANCE WITH LAW IN T HE PRESENT CASE THE ASSESSEE IS HIMSELF UNABLE TO ESTABLISH HOW MUCH FRINGE BENEFIT TAX IS DUE AS PER LAW EXCEPT BY STATING IN GROUND NO.8 SOME EXEMPTION WITHOUT ANY S UPPORTING EVIDENCE EVEN IN THE PAPER BOOK PAGES 21 & 22 IT WAS SIMPLY MENTIONED TH AT FRINGE BENEFITS AS PER RETURN SUBMITTED AND AS PER REVISED CLAIM BEFORE THE I.T.D EPTT. WITHOUT EXPLAINING HOW THE REVISED COMPUTATION IS AS PER LAW. IN THESE CIRCUMS TANCES WE ARE OF THE CONSIDERED VIEW THAT THE AO HAS LEFT WITH NO OTHER ALTERNATIVE INSTEAD OF ACCEPTING ORIGINAL COMPUTATION GIVEN BY THE ASSESSEE. EVEN BEFORE US A LSO NOTHING HAS BEEN FILED BY THE LD. COUNSEL FOR THE ASSESSEE BY EXPLAINING HOW MUCH FRINGE BENEFIT TAX IS DUE FROM THE ASSESSEE AFTER TAKING INTO ACCOUNT THE CONTENTS OF THE ASSESSEE IN GROUND NO.8. THEREFORE WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) TO BE INTERFERED WITH. 5 7. IN THE RESULT THE APPEAL OF THE ASSESSEE IS DISM ISSED. ORDER PRONOUNCED IN THE COURT ON 28.01.2011. SD/- SD/- . .. . . .. . B.R.MITTAL JUDICIAL MEMBER . .. .!' !'!' !'. .. . #$ #$ #$ #$ C.D.RAO ACCOUNTANT MEMBER. ( (( ('$ '$ '$ '$) )) ) DATE: 28.01.2011. #2 0 .3 4#3(5- COPY OF THE ORDER FORWARDED TO: 1. M/S.EMAMI LTD.(A/C. J.B.MARKETING & FINANCE LTD. SI NCE MERGED) 687- ANANDPUR E.M.BYPASS KOLKATA-700017. 2 THE DCIT CENTRAL CIRCLE-VIII 3. THE CIT 4. THE CIT(A)-CENTRAL-I KOLKATA 5. DR KOLKATA BENCHES KOLKATA /3 ./ TRUE COPY #2&:/ BY ORDER DEPUTY /ASST. REGISTRAR ITAT KOLKATA BENCHES R.G. (.P.S.)