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TMI Blog2013 (5) TMI 371X X X X Extracts X X X X X X X X Extracts X X X X ..... ncurred for employees, yet they have nowhere referred to any material on the basis of which they arrived at the said conclusion. The fact of benefit to employees has not been established, therefore, value of car expenses and hotel expenses cannot be added to the FB value declared by the assessee company. Brand promotion expenses - Held that:- They cannot be treated as FB to the employees as circular no.8 dtd.29.08.2005 CBDT has clarified that for levy of FBT employer-employee relationship is the basic condition. In the case under consideration payment had been paid to another group concern. Thus, there is no direct or indirect benefit has accrued to the employees of the appellant company. Therefore FBT cannot be levied on brand promotio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rsonal expenses and that the employee had travelled solely for the purpose of company work. Ground No. 3 Without prejudice to Ground No. 1, the learned CIT (A) has erred both in law and on facts in upholding the levy of FBT on motor car expenses incurred for the purpose of business. Ground No. 4 Without prejudice to Ground No. I, the learned CIT (A) has erred both in law and on facts in upholding the levy of FBT on brand subscription fees paid by the appellant. Ground No. 5 The learned CIT (A) ought to have appreciated that Section 11 5WB (1) defines the fringe benefit to mean any consideration for employment , and thus brand subscription fees were not liable to FBT since it did not constitute any consideration for employment n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... siness of manufacturing of Gear Boxes and parts, filed its return of Fringe Benefit Tax (FBT) on 30.10.2007 disclosing the value of Fringe Benefit (FB) to the extent of Rs. 64,88,600 /-. Assessing Officer (AO) finalised the assessment order u/s.115WE (3) of the Income-tax Act, 1961(Act), on 30.12.2009, determining the total value of FB at Rs.74.38 lakhs. 2. During the assessment proceedings, AO directed the assessee to submit the statement re-conciling the amounts considered for FBT with that of the amounts claimed as expenditure under the same/similar heads in P L A/c. Vide its letter dt.15-12-2009, assessee filed re-conciliation statement. After considering the statement, AO made dis-allowances on account of car on hire, brand subscript ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... FAA). After considering the submissions of the assessee, he held that employees were also benefitted on account of hotel expenses and car hire expenses, that additions made by the AO were in accordance with the provisions of law. With regard to brand subscription expenses, he held that these expenses were covered by FBT, that the brand subscription expenses were paid by the assessee for use of brand, that employees of the company were also ultimately benefitted by the activities of the assessee. Referring to Clause-D of Section 115WB(2) and the Central Board of Direct Taxes (CBDT) Circular No.8/2005, he confirmed the disallowance made by the AO. 3.1. Before us, Authorised Representative (AR) submitted that all the three issuesexpenses on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... FAA have held that expenses incurred by the assessee under the head hotel expenses and car expenses were incurred for employees, yet they have nowhere referred to any material on the basis of which they arrived at the said conclusion. The fact of benefit to employees has not been established, therefore, in our opinion value of car expenses and hotel expenses cannot be added to the FB value declared by the assessee company. As far as value of brand promotion expenses are concerned they cannot be treated as FB to the employees. In circular no.8 dtd.29.08.2005 CBDT has clarified that for levy of FBT employer-employee relationship is the basic condition. In the case under consideration payment had been paid to another group concern. Thus, ther ..... X X X X Extracts X X X X X X X X Extracts X X X X
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