Itl/30/2019 Of The Pr. Commissioner Of Income Tax-2, Nagpur v. Western Coalfields Limited, Coal Estates, Nagpur

1 IN THE HIGH COURT OF JUDICATURE AT BOMBAYNAGPUR BENCH AT NAGPUR INCOME TAX APPEAL NO. 30 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 ordersappearances, Court's orders or directionsand 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. 683.05 Lacs being value for fringebenefits in respect of expenditure on the welfare ofemployees by the Assessment Officer and maintained by theCommissioner of Income Tax [Appeals] but reversed by theIncome Tax Appeal Tribunal is the subject matter of challengein this appeal filed at the instance of the Revenue. Thesefringe benefits pertain to expenditure made in the context ofvalue of free issue of coal, medical facilities, educationalfacilities, grants to school and institutions, sports andrecreational facilities. The Tribunal has held that in view ofthe provisions of the National Coal Wage Agreement, the 2 provision of such benefits were made being statutoryobligations and hence were not exigible to Fringe Benefit Tax.3.Shri A. Parchure, learned counsel for the appellantsubmitted that not withstanding the National Coal WageAgreement, with regard to the head Sports and RecreationFacilities, the provisions of Section 115 WB(2)(E) andexplanation thereto introduced by virtue ofFinance Act of2008 such expenditure made was not to be considered asexpenditure for employees welfare. He, therefore, submitsthat since the present proceedings pertain to the assessmentyear 2008-09, the explanation cannot be given retrospectiveeffect. 4.Shri K.P. Dewani, learned counsel for the assesseesubmits that in the judgment of this Court in Income TaxAppeal No. 40 of 2015 concerning the same assessee, theprovisions of National Coal Wage Agreement were taken intoconsideration and it was held that the same was an allowableexpenditure being in the nature of a statutory obligation. Hefurther points out that relevant clauses of the National CoalWage Agreement (VII) and specially Clause 10.8.1 to indicatethat sports as well as cultural programmes are included inwelfare activities. J.Pethe 3 5.On hearing the learned counsel for the parties, itis clear that the implementation of the National Coal WageAgreement has been held to a statutory obligation which isbinding on the assessee. The expenditure towards sports andrecreation facilities is also a part of that agreement as is clearfrom Clause 10.8.1. As regards other heads of expenditure,the same have already been considered in Income Tax AppealNo.40 of 2015 pertaining to the very same assessee. Wetherefore find that the Tribunal has rightly allowed the appealfiled by the assessee. No substantial question of law arises forconsideration. The appeal is therefore, dismissed. JUDGE JUDGE