By C. N. Vaze
Shailesh Kamdar
Jagdish T. Punjabi
Bhadresh Doshi
Chartered Accountants
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New Page 1
24. (2010) 46 DTR (Pune)
(Trib.) 157
Brihan Maharashtra Sugar
Syndicate Ltd. v.
DCIT
A.Y. : 2006-07. Dated :
23-7-2010
Interest on loan taken for
purchase of motor cars — In the absence of a specific provision in clause (H) of
S. 115WB(2), the expenditure on payment of interest on loan taken for purchase
of motor cars cannot be included to compute fringe benefits.
Facts :
The assessee had incurred
Rs.54,28,382 as expenditure on running and maintenance of motor cars, which was
certified by the auditor. However, in the return of fringe benefits the assessee
had, from the aforementioned expense, excluded Rs.3,11,580 which pertained to
interest paid on loans taken for purchase of motor cars. The AO was of the view
that the words ‘repairs’, ‘running’ and ‘maintenance of motor cars’ shall cover
every expenses connected with use of motor cars in the business activities of
the assessee. Upon further appeal, the CIT(A) upheld the order of the AO.
Held :
In absence of specific
provision laid down u/s. 115WB(2)(H), the expenditure on payment of interest on
loan taken for purchase of motor cars cannot be included to compute fringe
benefits. Every required related expenses like repairs, running (including
fuel), maintenance of motor cars and amount of depreciation thereon have been
mentioned in specific wordings in the provision. Therefore, the interest paid on
loan taken for purchase of motor cars is not liable to Fringe Benefit Tax.
