INCOME TAX ACT, 1961

Section 115WE

Fringe benefit tax - Perquisites - Medical reimbursement and medical expenses for treatment in approved hospitals -

AO had disallowed medical reimbursement expenses, medical expenses for treatment in approved hospitals on the ground that no such amount was being taxed as perquisites in the hands of employees and as such was deemed as fringe benefit under section 115WE. CIT(A) had partly allowed the appeals by directing the AO to allow 50 per cent, of the value of fringe benefit tax on account of medical expenses for treatment in the approved hospital was against 100 per cent, disallowance.Held: It was not in dispute that only the amounts above Rs. 15,000 incurred by the assessee for treatment in the approved hospitals was taxed in the hands of employees. Assessee was a government undertaking having employees of more than 11,50,000 and all the expenses were subject to audit and no amount for treatment in approved hospital can be spent except payment, then entire expenses cannot be disallowed. Even if the expenses were in excess of Rs. 15,000 the same cannot be subjected to fringe benefit merely because of the fact that detail or evidence had not been brought on record. So, keeping in view the aforesaid facts, Tribunal allowed 85 per cent, of the amount incurred by the assessee on account of medical expenses for treatment in the approved hospitals for the reason that possibility of 15 per cent, of such cases being overlooked cannot be ruled out for the assessment years 2007-08 and 2008-09.

Followed:Vijaya Bank Head Office, Central Accounts Department v. Jt. CIT(LTU) (2010) 14 Taxmann.com 65 (Bang).

REFERRED : Godrej Properties Ltd. v. Addl. CIT (2011) 135 TIT 426 (Mum) and Bosch Lid. v. Dy. CIT (2011) 15 Taxmann.com 187 (Bang).

FAVOUR : In assessee's favour (partly)

A.Y. : 2006-07 to 2008-09

INCOME TAX ACT, 1961

Section 115WB

SUBSCRIBE FOR FULL CONTENT