Income Tax Appellate Tribunal - Chennai
Mahindra Holidays & Resorts India Ltd., ... vs Department Of Income Tax on 29 January, 2013
IN THE INCOME TAX APPELLATE TRIBUNAL
'C' Bench Chennai
Before Dr. O. K. Narayanan, Vice President
and Shri V. Durga Rao, Judicial Member
-------
ITA No. 2060/Mds/2012
Assessment year : 2009-10
The Dy. Commissioner of v. M/s. Mahindra Holidays &
Income Tax, Resorts India Ltd.,
Large Taxpayer Unit, Mahindra Towers,
Chennai. 17/18, Patullos Road,
Chennai-600 002.
(PAN : AAACM6469L)
(Appellant) (Respondent)
Appellant by : Shri Guru Bashyam,IRS
JCIT
Respondent by : Shri R. Vijayaraghavan,
Advocate
Date of Hearing : 29.01.2013
Date of Pronouncement : 29.01.2013
ORDER
PER V. DURGA RAO, JUDICIAL MEMBER:
This appeal by the Revenue is directed against the order of the CIT(Appeals), Large Taxpayer Unit, Chennai dated 14- 08-2012 for the assessment year 2009-10. :2: ITA No.2060/Mds/2012
2. Facts in brief are that the assessee is in the business of sale of holiday time share units. It filed e-return of fringe benefit for the assessment year 2009-10 on 29-09-2009 declaring fringe benefit of ` 9,43,89,393/-. The return was processed under section 115WE(1). Subsequently, the case was selected for scrutiny and assessment u/s 115WE(3) was completed on 15-12-2011 making addition of ` 10,50,61,573/-.
3. Aggrieved, the assessee carried the matter before the CIT(Appeals). The CIT(Appeals) by following the decision of the Tribunal in the assessee's own case for the assessment years 2006-07 and 2007-08 in ITA Nos. 512 & 513/Mds/2011 dated 30-03-2012 allowed the appeal filed by the assessee. The relevant portion of the order of the CIT(Appeals) is extracted as under :
"7. I have carefully considered the facts and the submissions the AR. I have also gone through the decision relied on by the ld. AR. The CIT(A) had confirmed the disallowance made by the AO in A.Y. 2007-08. On further appeal, the Hon'ble Tribunal has decided the issue in favour of the appellant in ITA No. 512 & 513/Mds/2011 for A.Ys. 2006-07 and 2007-08 dated 30.3.2012. The relevant part of the order is reproduced herein below ::3: ITA No.2060/Mds/2012
7. "Gift" is neither defined in the Fringe Benefit Tax provisions nor in the definition Section 2 of the Act. Hon'ble Apex Court through its decision in CIT vs. Bagyalakshmi & Co. AIR 1965 SC 1708 has permitted taking the aid of similar enactments when a word is not defined in the Act provided it is not inconsistent. The term "gift" is defined in Section 2(xii) of the Gift-tax Act, 1958 as under :-
"Gift means transfer by one person to another of any existing movable or immovable property made voluntarily and without consideration in money or money's worth and"
When looked from the meaning of 'gift' as defined above, can we say that there was no element of quid-pro-quo in the so called gifts given by the assessee to its customers here? There was a condition inbuilt. "We will give you a gift provided you pay the money and take a timeshare membership", this seems to be conditions. Quid pro quo is evidence since if the customer cancelled his membership, sums refunded were less the value of such gifts. Factual position here is that items which were given though called free of cost, had a consideration in built in it. In such a situation, we are of the opinion that the freebies will only fall within what is normally considered as sales promotion and answer to question No.61, in same :4: ITA No.2060/Mds/2012 Circular clearly goes in favour of the assessee. Therefore, we do not have any hesitation to hold that such amount could only be classified as sales promotion and could be considered as falling under clause (B) of sub-section (2) to Section 115WB of the Act?"
Since the facts are similar, respectfully following the order of the Hon'ble Tribunal (supra), the AO is directed to consider the amounts as sales promotion expenses u/s 115WB(2)(D) for the purpose of fringe benefit tax. Accordingly, the ground is allowed."
4. On being aggrieved, the Revenue has carried the matter before the Tribunal. The learned counsel for the assessee submitted that the issue is covered by the decision of the Tribunal in the assessee's own case for the assessment years 2006-07 and 2007-08 (supra). On the other hand, the learned DR fairly acceded that the issue is covered in favour of the assessee by the decision of the Tribunal (supra).
5. We have heard both the sides, perused the records and gone through the orders of the authorities below. In view of the above, we find no infirmity in the order passed by the CIT(Appeals). The same is therefore confirmed and the :5: ITA No.2060/Mds/2012 ground raised by the Revenue in this appeal is accordingly dismissed.
6. In the result, the appeal filed by the Revenue is dismissed.
Order pronounced in the open court at the time of hearing on Tuesday, the 29th of January, 2013, at Chennai.
Sd/- Sd/-
(Dr. O. K. Narayanan) (V.Durga Rao)
VICE PRESIDENT JUDICIAL MEMBER
Chennai,
Dated the 29th January, 2013.
H.
Copy to: Assessee/AO/CIT(A)/CIT/D.R./Guard file