ACIT, New Delhi v. Shri Takatsugu Fukumoto, New Delhi

ITA 4197/DEL/2009 | 2004-2005
Pronouncement Date: 26-02-2010 | Result: Dismissed

Appeal Details

RSA Number 419720114 RSA 2009
Bench Delhi
Appeal Number ITA 4197/DEL/2009
Duration Of Justice 3 month(s) 30 day(s)
Appellant ACIT, New Delhi
Respondent Shri Takatsugu Fukumoto, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 26-02-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted H
Tribunal Order Date 26-02-2010
Date Of Final Hearing 22-02-2010
Next Hearing Date 22-02-2010
Assessment Year 2004-2005
Appeal Filed On 27-10-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH H DELHI BEFORE SHRI K.G. BANSAL AND SHRI GEORGE MATHAN ITA NO. 4197(DEL)/2009 ASSESSMENT YEAR: 2004-05 ASSTT. COMMISSIONER OF INCOME SHRI TAKATSUGU FUKUMOTO TAX CIRCLE 46(1) NEW DELHI. VS. 401-A GAURI SADAN HAILEY ROAD NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI N.K. CHAND S R. DR RESPONDENT BY : SHRI PA NCHAM SETHI & SHRI VIRENDER KUMAR C.AS ORDER PER K.G. BANSAL : AM THIS APPEAL EMANATES FROM THE ORDER OF THE C IT(APPEALS)-XXX NEW DELHI PASSED ON 28.07.2009 IN APPEAL NO. 130/07-08 AND IT PERTAINS TO ASSESSMENT YEAR 2004-05. THE CORRESP ONDING PENALTY ORDER WAS FRAMED BY THE DEPUTY COMMISSIONER OF INCOME- TAX CIRCLE 46(1) NEW DELHI ON 28.6.2007 UNDER THE PROVISIONS O F SECTION 271(1)(C) OF THE INCOME-TAX ACT 1961. THE REVENUE HAS TAKE N UP TWO GROUNDS IN THE APPEAL THE SUM AND SUBSTANCE OF WHICH IS THAT ON T HE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. C IT(APPEALS) ERRED IN DELETING THE PENALTY IMPOSED BY THE AO U/S 271 (1)(C) OF THE INCOME-TAX ACT 1961 WHEN THE ASSESSEE HAD ACCEPTED THE ADDITION MADE BY THE AO ITA NO. 4197(DEL)/2009 2 AND PAID THE TAX ACCORDINGLY. IT IS MENTIONED THAT THE REVENUE IS IN APPEAL IN HIGH COURT AGAINST THE ORDERS OF THE IT AT IN THE CASE OF RBF RIGS CORPORATION VS. ACIT AND FUMIO GOTO REL IED UPON BY THE LD. CIT(APPEALS). 2. THE FACTS OF THE CASE ARE THAT THE ASSESS EE IS A JAPANESE NATIONAL. HE WAS EMPLOYED IN INDIA IN THE LIAISON OFFICE O F ETOCHU CORPORATION. THE RETURN OF INCOME WAS FILED DECLARING TOTAL INCOME OF RS. 97 16 390/-. THE ASSESSMENT WAS FRAMED U/S 143(3) AT TO TAL INCOME OF RS. 1 08 16 356/-. THE ADDITION OF RS. 10 99 966/- AROSE ON ACCOUNT OF TWO GROUNDS NAMELY -(I) TAX PAID BY THE EMPLOYER O N BEHALF OF THE ASSESSEE WAS CONSIDERED MONETARY PERQUISITE AND THUS NON -INCLUSION THEREOF FROM THE TOTAL INCOME U/S 10(10CC) WAS NOT ALLOWED; AND (II) THE TAX PAID BY THE EMPLOYER WAS CONSIDERED TO BE SALARY FOR C OMPUTING THE VALUE OF PERQUISITE IN RESPECT OF RENT-FREE ACCOMMODATIO N PROVIDED BY THE EMPLOYER. THE ASSESSEE ACCEPTED THE ASSESSME NT. THE AO HAD ALSO INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) WHI CH WERE CONCLUDED BY LEVYING PENALTY OF RS. 3 62 989/- ON 28.6.2007. AGGRIEVED BY THIS ORDER THE ASSESSEE FILED APPEAL BEFORE THE CIT(APPEAL S)-XXX NEW DELHI WHO DELETED THE PENALTY. IT WAS MENTIONED THAT T HE ADDITIONS WERE MADE ON ITA NO. 4197(DEL)/2009 3 ACCOUNT OF TREATING THE TAX PAID BY THE EMPLOYER ON BEHALF OF THE ASSESSEE AS MONETARY PERQUISITE. THIS FINDING OF THE AO I S IN CONTRADICTION WITH THE ORDERS OF THE TRIBUNAL IN THE CASE OF RBF R IGS CORPORATION VS. ACIT 109 ITD 14 AND FUMIO GOTO VS. ACIT IN ITA NO . 204(DEL)/2007. THUS EVEN THOUGH THE ASSESSEE HAS ACCEPTED T HE ADDITION THE VERY BASIS OF THE ADDITION IS IN DISPUTE AND THEREFO RE THE LEVY OF PENALTY WAS NOT JUSTIFIED. 3. BEFORE US THE LEARNED DR RELIED ON THE ORDE R OF THE AO. IT WAS SUBMITTED THAT THE ISSUE HAS BEEN DISPUTED BY T HE REVENUE BEFORE THE HONBLE HIGH COURT OF DELHI. IN REPLY THE LD. CO UNSEL SUBMITTED THE AFORESAID FACTS AND ARGUED THAT THE ISSUE W AS HIGHLY DEBATABLE. IN FACT ALL THE ORDERS OF THE TRIBUNAL ARE IN FAVOUR OF THE ASSESSEE. THEREFORE THE LEVY OF PENALTY WAS NOT JUSTIFIED IN VIEW OF THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. BACA RDI MARTINI INDIA LTD. (2007) 288 ITR 585. 4. WE HAVE CONSIDERED THE FACTS OF THE CASE A ND SUBMISSIONS MADE BEFORE US. SECTION 10(10CC) EXCLUDES NON-MONE TARY PERQUISITES FROM THE TOTAL INCOME BY STATING THAT IN CASE OF AN EMPLOYEE BEING AN ITA NO. 4197(DEL)/2009 4 INDIVIDUAL DERIVING INCOME IN THE NATURE OF A PERQUISITE NOT PROVIDED FOR BY WAY OF MONETARY PAYMENT WITHIN THE M EANING OF CLAUSE (2) OF SECTION 17 THE TAX ON SUCH INCOME ACTUALLY PA ID BY HIS EMPLOYER AT THE OPTION OF THE EMPLOYER ON BEHALF OF SUCH EMPLOYEE SHALL NOT BE INCLUDED IN THE TOTAL INCOME NOTWITHSTANDING ANYTHING CONT AINED IN SECTION 200 OF THE COMPANIES ACT 1956. THE ISSUE WHETHER TAX PAID BY THE EMPLOYER IS A MONETARY PERQUISITE OR NON-MONETARY PERQUISI TE IS A HIGHLY DISPUTED ISSUE. IN FACT ALL THE DECISIONS OF THE TRIBU NAL ARE IN FAVOUR OF THE ASSESSEE. IN SUCH A CIRCUMSTANCE IT CANNOT BE SAID EITHER THAT THE ASSESSEE CONCEALED PARTICULARS OF INCOME OR F URNISHED INACCURATE PARTICULARS OF INCOME WHEN TAX PAID BY THE EMPLO YER WAS NOT INCLUDED IN THE TOTAL INCOME. THE ORDER OF THE LD. CIT(APP EALS) REQUIRES TO BE UPHELD ON THIS VERY CONSIDERATION ITSELF. IN VIEW THERE OF IT IS NOT NECESSARY FOR US TO GO INTO THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF BACARDI MARTINI INDIA LTD. (SUPRA). 5. IN THE RESULT THE APPEAL IS DISMISSED. THE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 26 TH FEBRUARY 2010. SD/- SD/- (GEORGE MATHAN) (K.G.BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE OF ORDER: 26TH FEBRUARY 2010. SP SATIA ITA NO. 4197(DEL)/2009 5 COPY OF THE ORDER FORWARDED TO:- 1. MR. TAKATSUGU FUKUMOTO NEW DELHI. 2. DY. CIT CIRCLE 46(1) NEW DELHI. 3. CIT(A) 4. CIT NEW DELHI. 5. DR ITAT NEW DELHI. ASSISTANT REGISTRA R.