Bombay High Court
The Pr. Commissioner Of Income ... vs Western Coalfields Limited, Coal ... on 6 January, 2021
Bench: A.S. Chandurkar, Nitin B. Suryawanshi
3A ITL 24-2019.odt
1
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH AT NAGPUR
INCOME TAX APPEAL NO. 24 OF 2019
The Pr. Commissioner of Income Tax-2 Nagpur
...Versus...
Western Coalfields Limited, Coal Estates, Civil Lines, Nagpur.
-------------------------------------------------------------------------------------------
Office Notes, Office Memoranda of Coram, Court's or Judge's orders
appearances, Court's orders or directions
and Registrar's orders
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - ----- ------------ -
Shri Anand Parchure, Advocate for appellant.
Shri K.P. Dewani, Advocate for Sole respondent
CORAM : A. S. CHANDURKAR &
N. B. SURYAWANSHI, JJ.
DATE : 06/01/2021
1. Heard.
2. Addition of Rs. 597.22 Lacs being value for fringe
benefits in respect of expenditure on the welfare of
employees by the Assessment Officer and maintained by the
Commissioner of Income Tax [Appeals] but reversed by the
Income Tax Appeal Tribunal is the subject matter of challenge
in this appeal filed at the instance of the Revenue. These
fringe benefits pertain to expenditure made in the context of
value of free issue of coal, medical facilities, educational
facilities, grants to school and institutions, sports and
recreational facilities. The Tribunal has held that in view of
the provisions of the National Coal Wage Agreement, the
3A ITL 24-2019.odt
provision of such benefits were made being statutory
obligations and hence were not exigible to Fringe Benefit Tax.
3. Shri A. Parchure, learned counsel for the appellant
submitted that not withstanding the National Coal Wage
Agreement, with regard to the head Sports and Recreation
Facilities, the provisions of Section 115 WB(2)(E) and
explanation thereto introduced by virtue of Finance Act of
2008 such expenditure made was not to be considered as
expenditure for employees welfare. He, therefore, submits
that since the present proceedings pertain to the assessment
year 2006-07, the explanation cannot be given retrospective
effect.
4. Shri K.P. Dewani, learned counsel for the assessee
submits that in the judgment of this Court in Income Tax
Appeal No. 40 of 2015 concerning the same assessee, the
provisions of National Coal Wage Agreement were taken into
consideration and it was held that the same was an allowable
expenditure being in the nature of a statutory obligation. He
further points out that relevant clauses of the National Coal
Wage Agreement (VII) and specially Clause 10.8.1 to indicate
that sports as well as cultural programmes are included in
welfare activities.
3A ITL 24-2019.odt
5. On hearing the learned counsel for the parties, it
is clear that the implementation of the National Coal Wage
Agreement has been held to a statutory obligation which is
binding on the assessee. The expenditure towards sports and
recreation facilities is also a part of that agreement as is clear
from Clause 10.8.1. As regards other heads of expenditure,
the same have already been considered in Income Tax Appeal
No.40 of 2015 pertaining to the very same assessee. We
therefore find that the Tribunal has rightly allowed the appeal
filed by the assessee. No substantial question of law arises for
consideration. The appeal is therefore, dismissed.
JUDGE JUDGE
J.Pethe
