9911796707
TMI Blog2011 (11) TMI 704X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the assessee are directed against the CIT(A) s order in sustaining the levy of Fringe Benefit Tax (FBT) of the expenditure incurred by the assessee towards alleged advertisement amounting to ₹ 75,77,632/- holding the same to be the sales promotion expenses covered under sec. 115WB(2)((D) of the Act being in the nature of payment made to celebrity for celebrity endorsement. 3. In this case, the return of Fringe Benefit Tax was filed by the assessee on 20.11.2006 declaring total value of Fringe Benefits at ₹ 42,43,106/-. The return was picked-up for scrutiny assessment. In the course of assessment proceedings, it was found by the AO that the assessee has not considered sales promotion expenses amounting to ₹ 75,77,63 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and expenditure on `brand or `brand ambassador or `celebrity endorsement does not fall within the scope of clauses (i) to (vi) of the Proviso to clause (D) of sub-sec. (2) of sec. 115WB of the Act. The learned CIT(A) further observed that the view taken by him is further strengthened by the fact that sub-clause (viii) excluding the expenses on celebrity endorsement from the purview of sales promotion and publicity was inserted in the Statute by the Finance Act, 2007 with effect from 1.4.2008 and as such, the assessee s contention that the expenses on celebrity endorsement was excluded from the expenditure incurred on sales promotion and publicity implicit in the earlier clauses (i) to (vi) to the Proviso of sec. 115WB(2)(D) is not corre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee in the year under consideration. 9. We have carefully perused the provisions contained in sec. 115WB of the Act, as they stood in the Assessment Year 2006-07. Sub-sec.(2) of sec. 115WB provides that the fringe benefits shall be deemed to have been provided by the employer to his employees, if the employer has incurred, in the course of his business or profession, any expenses on, or made any payment for the various purposes as specified in clauses (A) to (Q). Clause (D) is with regard to the expenses incurred on, or payment made for, sales promotion including publicity, but excluding certain expenditure on advertisement specified in sub-clauses (i) to (vii) thereto. Sub-clauses (i) and (v) of Proviso to clause (d) of sec.115WB(2) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilable media including but not restricted to print, television including cable T.V., radio and satellite television with part of its footprint primarily over India which may incidentally cover other countries. For the said purpose of advertising Crocin, a shooting of film was required to be made at such places and during such hours as may be mutually agreed between Mr. Kapil Dev and the assessee company. It was further provided that Mr. Kapil Dev would made himself available for fifteen full days (inclusive of travel time) during each contract year of the agreement for shooting of moving films/still photographs or for promotional activities on such days as may be mutually agreed upon. In the agreement, it was also provided that the company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rious issues and questions, which were frequently asked for. Under question No.65, whether expenditure on making ad-film is liable to FBT, the Board has clarified that an ad-film is a medium for advertisement and therefore fall within the scope of clause (i) of proviso to clause (D) of subsec. (2) of sec. 115WB; and therefore, any expenditure on making an ad-film is not liable to FBT. It is not in dispute that prior to Assessment Year 2008- 09, the expenditure by way of payment to any person of repute for promoting the sales of goods of the business of the employer was not excluded from the purview of sales promotion including publicity. However, in the present case, the payment has been made by the assessee for incurring expenditure on adv ..... X X X X Extracts X X X X X X X X Extracts X X X X
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