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The Tax Publishers Leave travel concession (LTC) claimed by employees travelling within India but by making detour overseas destinations - whether employer was liable to do TDS by disallowing the LTC exemption under Section 10(5) read with rule 2B. *Facts:* The case is a well reported and publicized Supreme court judgment but of the same assessee pertaining to earlier assessment year (2012-13). Arising out of a direct survey on the assessee, it was found that the assessee had allowed its employees avail Leave travel concession (LTC) exemption benefit under Section 10(5) read with rule 2B despite they having travelled to Indian destinations but by detouring to foreign locations. Revenue's argument in this case was primarily that neither did the act nor the rules envisage granting this in the scope of the exemption. What was envisaged is journeys between Indian destinations performed locally whether directly or indirectly and not by detouring foreign locations certainly. Assessee was held to be in default for non-deduction of TDS on salaries thus. Assessee's appeal was eventually turned down by the Apex court with the case decided in favour of the revenue. In this case the assessment year alone changes viz. assessment year 2014-15. Held against the assessee that they were in default for non-deduction of TDS under salaries to their employees for accepting the wrong LTC exemption. *Applied:* Supreme Court in assessees own case in Civil Appeal No. 8181/2022 dated 4-11-2022 *Ed. Note:* The fine print is the assessee lost before CIT(A), then before ITAT, then before HC as well and finally before SC in the original legal journey as traced by the SC decision. *Case:* State Bank of India v. ACIT 2023 TaxPub(DT) 4621 (Del-Trib)

The Tax Publishers

Leave travel concession (LTC) claimed by employees travelling within India but by making detour overseas destinations - whether employer was liable to do TDS by disallowing the LTC exemption under Section 10(5) read with rule 2B.

Facts:

The case is a well reported and publicized Supreme court judgment but of the same assessee pertaining to earlier assessment year (2012-13). Arising out of a direct survey on the assessee, it was found that the assessee had allowed its employees avail Leave travel concession (LTC) exemption benefit under Section 10(5) read with rule 2B despite they having travelled to Indian destinations but by detouring to foreign locations. Revenue's argument in this case was primarily that neither did the act nor the rules envisage granting this in the scope of the exemption. What was envisaged is journeys between Indian destinations performed locally whether directly or indirectly and not by detouring foreign locations certainly. Assessee was held to be in default for non-deduction of TDS on salaries thus. Assessee's appeal was eventually turned down by the Apex court with the case decided in favour of the revenue. In this case the assessment year alone changes viz. assessment year 2014-15.

Held against the assessee that they were in default for non-deduction of TDS under salaries to their employees for accepting the wrong LTC exemption.

Applied:

Supreme Court in assessees own case in Civil Appeal No. 8181/2022 dated 4-11-2022

Ed. Note: The fine print is the assessee lost before CIT(A), then before ITAT, then before HC as well and finally before SC in the original legal journey as traced by the SC decision.

Case: State Bank of India v. ACIT 2023 TaxPub(DT) 4621 (Del-Trib)