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TMI Blog2012 (9) TMI 1066X X X X Extracts X X X X X X X X Extracts X X X X ..... 12-9-2012 - D. K. Agarwal (Judicial Member) And N. K. Billaiya (Accountant Member) For the Appellant : V. Krishnamoorthy For the Respondent : Sanjiv M. Shah ORDER N. K. Billaiya (Accountant Member) This appeal by the Revenue has challenged the correctness of the order of Ld. CIT(A)-18, Mumbai dt. 25.7.2011 pertaining to assessment year 2006-07. 2. The Revenue has raised following grounds of appeal: 1. On the facts and in the circumstances of the case and in law, the CIT(A) erred in excluding Sales Promotion expenses of ₹ 6,65,83,073/- from Fringe Benefit Tax, without appreciating the facts brought on record by the AO during assessment proceedings and remand proceedings as well. 2. On the facts an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nses were not liable for FBT and as the assessee has not provided any details or explanation for substantiating its claim, therefore the AO went on to consider the entire expenses of ₹ 7,84,27,081/- on Sales Promotion, Promotional events and Meets as liable for FBT @ 20%. The assessee agitated this findings of the AO before the Ld. CIT(A). 4. During the course of the appellate proceedings, the assessee filed a chart giving full details of the expenses and explanations for exclusion of the same from FBT. The same was transmitted to the AO by the Ld. CIT(A) calling for a Remand report. The AO submitted the Remand Report dt. 17.1.2011. After considering the submissions and the explanation given by the assessee, the Ld. CIT(A) allowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s: a) The scope of the term fringe benefits provided, b) The scope of the term fringe benefits deemed to have been provided and c) The basis of valuation of the above. 7. Being an altogether new concept introduced in the statute book, a number of issues were raised by the trade and industry at different forums after the presentation of the Financial Bill 2005 and also after its enactment. The CBDT decided to clarify the issues raised on such forum in question and answer: Q. No. 2 Whether employer-employee relationship is a pre-requisite for the levy of FBT? Ans. Yes Q. No. 60 Whether sales promotion includes sales discount or rebates to wholesalers or customers or bonus points given to credit card customers and, if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pe of clause (D) of subsection (2) of Sec. 115 WB and, therefore, not liable to FBT. 8. Now let us see whether the explanations of the assessee fit into the answers given by the CBDT on the questions pertaining to the facts of the case. S. No. Expense Head Amount (Rs) Nature of expenses 1. Sales Promotion(Others) 1,33,16,614/- Discount Schemes, Festival Discounts, Sales Discounts Target Incentives given to the distributors 2. Promotional Events (Product campaigns) 9,34,123/- Expenditure incurred for the awareness of the new produ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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