9911796707
TMI Blog2018 (4) TMI 1069X X X X Extracts X X X X X X X X Extracts X X X X ..... nder section 115 WD of the Income Tax Act,1961. During the assessment proceedings, the Assessing Officer noticed that the respondent-assessee debited an amount of Rs. 16,93,06,239/as marketing and support service charges to its parent company account. Therefore, a show cause notice was issued by the Assessing Officer (AO) calling upon the assessee as to why the marketing and support service charges should not be considered for FBT. By way of reply, the respondent assessee submitted that its clients are located outside India and in particular in USA and therefore, there is a requirement of having software engineers posted at various locations in USA as per the contract. It was contended that the software engineers employed in USA are on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the above it is evident that the provisions of FBT apply only to the employees and there is legal requirement of `employee and employer relationship' before the said provisions are invoked. This is the case where the payments are made to the parent company which is not the employee and therefore, the decision taken by the CIT (A) is fair and reasonable and it does not call for any interference. Accordingly, grounds raised by the Revenue are dismissed." 4 The learned counsel for the appellant submits that the question of law as framed in paragraph 6.1 of the Memorandum of Appeal arises for consideration. His submission is that in the facts of the present case, the expenditure incurred by the respondent assessee is on sales promotion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and by virtue of which these benefits are admissible to the employees. They could be under several heads and a nomenclature attached to it would not be decisive provided the nature thereof is falling within the above quoted provisions. In the present case, the Tribunal made reference extensively to the provision and to the understanding of the same by the Revenue itself. While it is true that it is the duty of a Court of law to interpret and construe a provision and in construction thereof, the Court shall not be guided by any opinion or view of the Executive or Revenue, however, when the argument before us is that there is no basis for the conclusion that these benefits and which are taxable arise out of a employeremployee relationship th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 115 (WB). In paragraph 2 of the said order, there is a reference to show cause notice issued to the respondentassesse calling upon it to state as to why marketing and support service charges should not be considered for FBT. The reply filed by the respondent-assessee is quoted in paragraph 2. In the reply, a stand was taken that the assessee has its parent company located in USA to which the payment of marketing and support service charges has been made. It was contended that the amount is being paid to the parent company for making payment to the technical personnel employed by the parent company in different locations in USA. The ultimate finding recorded by the Assessing Officer is that on all expenses incurred by the group of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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