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TMI Blog2014 (1) TMI 439X X X X Extracts X X X X X X X X Extracts X X X X ..... rges and Others” are not liable for FBT are correct, for the above reasons and is in accordance with law” - Payment on account of ‘Visa charges and others’ are legitimate business expenses and cannot be considered as paid to the employees or incurred for the benefit of employees - These payments are not consideration for employment – Decided against Revenue. - ITA No.543/Bang/2012 - - - Dated:- 19-4-2013 - N V Vasudevan and Jason P Boaz, JJ. For the Appellant : Shri Etwa Munda, CIT-III(DR) For the Respondent : Shri Padamchand Khincha, CA ORDER:- Per: N V Vasudevan: This is an appeal by the revenue against the order dated 17.01.2011 of the CIT(Appeals)-I, Bangalore relating to assessment year 2008-09. 2. The only grie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No.96/Bang/2011 for the A.Y. 2006-07 has held as follows:- 6.1 We have heard both parties, carefully perused and considered the material on record. The assessee in the instant case has incurred expenses under the head Visa Charges and Others which include expenses towards credential checks, fraud detection fees, professional fee towards criminal records, legalization charges, residence permits, visa charges, etc. The purpose of incurring these expenditures is to apply for or make a request for entry to the foreign country by the employees of the assessee company with the objective of carrying on of assignments or projects outside India. The incurring of visa charges may result in tour and travel of employees but the objective and pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peech and the Memorandum explaining the provisions of the Finance Bill. Likewise, in our opinion, an expenditure which does not result in any benefit to an employee would not be liable for FBT. FBT is leviable only in a case where expenditure is incurred by the employer ostensibly for the purpose of business but includes in partially a benefit of a personal nature which cannot be attributed or is difficult to attribute. The legislature itself has excluded legitimate business expenditure from the purview of FBT as seen from the Finance Minister s speech in the Rajya Sabha on 5.5.2005, the relevant extract of which is as under: . Even under the fringe benefit, as amended by the Lok Sabha, we have taken care to exclude what I r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s FBT on the employer on the value of such benefits provided or deemed to have been provided to the employees. Thus, the intention of creation of a deeming fiction under section 115WB(2) is to include an expenditure resulting in collective enjoyment of fringe benefits by the employees and it is difficult or not feasible to attribute such benefit personally to employees. The legislature itself has clarified that where the benefits are fully attributable to employees, the same continues to be taxable in the hands of the employees. On a plain reading of subsection 1 and 2 of section 115WB, it would be evident that subsection 1 covers those fringe benefits which can be fully attributed to employees and sub-section 2 covers those fringe benefits ..... X X X X Extracts X X X X X X X X Extracts X X X X
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