9911796707
TMI Blog2012 (10) TMI 1058X X X X Extracts X X X X X X X X Extracts X X X X ..... fall under of the provisions of section 115WB - Decided against the assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... per the assessee, the lower authorities have ignored the provisions of section 115WA of the Act which, according to the appellant, confines the chargeability of FBT in respect of fringe benefits provided or deemed to have been provided to employee or employees alone. 4. In this connection, the point made out by the assessee is that, for instance, expenditure on travelling of non-employees, i.e. customers/outsiders has also been considered as a deemed fringe benefit in terms of section 115WB(2) of the Act, which is wrong. The plea of the assessee is that deeming provision of sub-section (2) of section 115WB would operate only if the expenditure specified therein is incurred inconsideration for employment or in other words, it is incurred in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 115WB(1), inasmuch as the benefits by way of clauses (a) to (d) listed therein are directed towards the employees or their families including former employees. Subsection (2) of section 115WB, which is the focus of controversy before us reads as under: "(2) The fringe benefits shall be deemed to have been provided by the employer to his employees if the employer has, in the course of his business or profession (including any activity whether or not such activity is carried on with the object of deriving income, profits or gains) incurred any expense on, or made any payment for, the following purposes, namely:- (A)……………….(Q)" 7. Sub-section (2) of section 115WB of the Act elucidates the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... venue that any payment made by an assessee for the purposes contained in Clauses (A) to (Q) of subsection (2) of section 115WB shall result in 'fringe benefits' deemed to have been provided by the employer to his employees. In other words, as per the Revenue the expenses listed in Section 115WB(2) need not be incurred on employees so as to quality for charging of FBT. In our considered opinion, sub-section (1) of section 115WB itself qualifies that the meaning of the expression 'fringe benefits' contained therein is "For the purposes of this Chapter-----" and, therefore, it implies that the overriding condition of the incurrence of expenditure in consideration for employment is even relevant for the purposes of assessing or ascertaining fri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liability on the assessee. Secondly, it is also to be appreciated that the stand of the Revenue is also not in consonance with the legislative intent. The import and intent of introducing Chapter XII-H was to tax such benefits which are collectively enjoyed by the employees and cannot be attributed to any individual employee. Such benefits escape taxation as perquisite in the hands of the individual employees as they are not attributable to any individual employee. Therefore, such benefits were sought to be taxed in the hands of the concerned employer. Though the speech of the Hon'ble Finance Minister may not be a decisive test, so however, it is indeed a relevant and contemporaneous exposition of the legislative intent and can be relied u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... does not tell the details whether same has been incurred on food of guests or employees in the course of employment. So, that has to be looked into by the Assessing Officer under the provisions of section 115WB(2) after providing due opportunity of hearing to the assessee. Regarding gifts, these payments include the club payments but again it is not clear from the details furnished by the assessee whether same has been incurred on employees of the assessee or outsiders. So the Assessing Officer is directed to verify the same and allow the same after due verification of the same under the provisions of section 115WB(2) of the Act after providing due opportunity of hearing to the assessee. The next issue is with regard to Auditors travelling ..... X X X X Extracts X X X X X X X X Extracts X X X X
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