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TMI Blog2014 (5) TMI 655X X X X Extracts X X X X X X X X Extracts X X X X ..... e in relation to non-employees and for the business purpose of the assessee - assessee contended that the expenses were not related to its employees and were incurred only in relation to non-employees and for business purpose of the assessee - thus, the matter is remitted back to the AO for fresh adjudication – Decided in favour of Assessee. - I.T.A. No. 3234 /AHD/2010 - - - Dated:- 9-5-2014 - Shri G. C. Gupta And Shri Anil Chaturvedi, A.M.,JJ. For the Appellant : Shri Vartik Choksi For the Respondent : Shri O. P. Meena, Sr., D.R. ORDER Per Shri Anil Chaturvedi,A. M. 1. This appeal is filed by the Assessee against the order of CIT(A)-VIII, Ahmedabad dated 22.10.2010 for A.Y. 2007-08. 2. The relevant facts as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bent upon him to render his appellate decision at least on the following issues: a) On the appellant's challenge to the validity of the assessment order impugned before him, inter alia, on the ground that the relevant provisions in respect of the Fringe Benefit Tax were unconstitutional (vide Grounds No. 1 and 2 of its appeal before him); b) On the appellant's challenge to the levy of Fringe Benefit Tax of Rs. 15,23,231 on the value of fringe benefits of Rs.45,25,345 (corresponding to expenditure of Rs.90,50,068 which, in the contention of the appellant, was not liable to Fringe Benefit Tax) vide the assessment order impugned before him; c) On the appellant's challenge to the levy of interest presumably amounting to Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ground or grounds of appeal either before or at the time of hearing of the appeal. Though the Assessee has raised several grounds, the only effective ground is with respect to levy of Fringe Benefit Tax in respect of Sales Promotion Expenditure. 4. During the course of assessment proceedings, A.O noticed that Assessee had incurred Sales Promotion Expenditure. He also noticed that of the total Fringe Benefit Tax (FBT) of Rs. 90,50,688/- on the sales promotion expenses, Assessee had paid tax of Rs. 76,37,779/- on benefits which were related to the employees and taxes of Rs. 15,23,231/- on nonemployee related benefits were parked in the form of fixed deposit with the State Bank of Saurashtra. Assessee had claimed that the expenses made und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s there is no scope of adjustment in Section and all the expenditure debited to profit loss account and covered by those provisions are subject to FBT and Assessing Officer has rightly considered sales promotion expenditure while determining FBT in case of appellant. The decision of Hon'ble Gujarat High Court does not put any stay on assessment or appellate proceedings and in such order it is only stated that till the disposal of the final appeal by the High Court, assessee can deposit FBT to separate bank account for expenditure which are not for the benefit of employees. Hence, decision relied upon by appellant in present case is not applicable. Considering this, addition to the value of fringe benefits made by Assessing Officer is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the CIT(A) and the order of the Tribunal in Arvind Fashions Ltd. Vs. DCIT (supra). We find that the decision of the ITAT, Ahmedabad Bench in Arvind Fashions Ltd. Vs. DCIT (supra) has held that the provision of FBT could not be invoked in respect of the expenses which were not incurred on employees or their family members. The Tribunal in this case has referred to the decisions of the Co-ordinate Bench of the ITAT, Ahmedabad, Pune and Bangalore, which have similarly held that the FBT could not be invoked on expenses which were not incurred on the employees or their family members. However, we find that there is no clear cut finding recorded by the AO or the CIT(A) in their order that whether the addition made were relating to the expen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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