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TMI Blog2024 (2) TMI 1104X X X X Extracts X X X X X X X X Extracts X X X X ..... oting the products of the assessee. Therefore, from the aforesaid remand report, it is sufficiently evident that the Revenue has accepted that the expenses under the head CRM/KAM are incurred for the benefit of the Doctors. We find that in Pr.CIT v/s Aristo Pharmaceuticals (P) Ltd., [ 2020 (1) TMI 1155 - BOMBAY HIGH COURT] after analysing the provisions of section 115WA of the Act held that for levy of FBT, the relationship of employer and employees is the sine qua non and the fringe benefits have to be provided by the employer to the employees in the course of such relationship. Accordingly, the Hon ble High Court held that since there was no employer-employee relationship between the taxpayer and the Doctors, the expenditure incurred for distributing free samples to the Doctors could not be construed as fringe benefits to be brought within the additional tax net by levy of FBT. Since, in the present case, no material has been brought on record by the Revenue to show that the Doctors were employees of the assessee, therefore, addition made by the AO u/s 115WB(2)(d) and section 115WB(2)(o) of the Act is deleted. Grounds raised by the assessee are allowed. - SHRI OM PRAKA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Amount (in Rs.) 1. Business promotion expenses 6,07,95,906 2. Key Account Manager expenses ( KAM ) 3,44,75,882 3. Customer Relation Management ( CRM ) 2,74,75,699 4. Gift articles 10,46,54,178 5. Conference and meeting expenses 78,80,515 Total 23,52,82,100 4. The Assessing Officer ( AO ) vide order dated 31/12/2008 passed under section 115WE(3) of the Act held that the above expenditure of Rs. 23,52,82,100 is such expenditure that is routed through the CRM or KAM personal on which there is no controlled by the assessee so as to ensure that the same is allowable under section 37(1) of the Act. It was further held that the very fact that the incurring of the above expenses are not fully receipted by the beneficiaries and that the CRM/KAM personnel only submit the details, neither the assessee nor such CRM/KAM can support the claim as requ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ness revolves around and depends on Rx generated by doctors. A doctor gives an Rx based on the widely displayed reasons. Two patents have emerged Large amount ranging from 10 thousand to 1 lakh under the banner of CRM and smaller amount of Rs. 100 to Rs. 5000/-. The former is a well planned calculated risk of higher level of line managers for a pre-determined time frame in order to get the result. The smaller amount could just be an engagement programme conceived and controlled by lower hierarchy and the amounts are spent on doctors. iv) Regarding the gift articles, it is stated that the gift are given to doctors. v) As for the Conference and meeting expensers also, the assessee merely stated that all the expenses are incurred on non-employees. 8. It is also undisputed that out of the entire expenditure of Rs. 23,52,82,100, the AO considered the amount of Rs. 11,76,41,050 for determining the taxable value of fringe benefits since 50% of the aforesaid amount was already considered for disallowance in the assessment under section 143(3) of the Act. We find that in the appellate proceedings against the order passed under section 143(3) of the Act, the learned CIT(A) called f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tails of expenses, vouchers, etc. to substantiate its claim that the Advertisement and Business Promotion expenses are recurring expenditures incurred during the normal course of the business exclusively for the purpose of business. Further, the AO after examination and verification of these details on a text check basis stated that the expenses are incurred by field staff for giving various gifts, travel facilities, etc. to the Doctors for promoting the products of the assessee. Therefore, from the aforesaid remand report, it is sufficiently evident that the Revenue has accepted that the expenses under the head CRM/KAM are incurred for the benefit of the Doctors. 10. We find that the Hon ble jurisdictional High Court in Pr.CIT v/s Aristo Pharmaceuticals (P) Ltd., [2020] 423 ITR 295 (Bom.) after analysing the provisions of section 115WA of the Act held that for levy of FBT, the relationship of employer and employees is the sine qua non and the fringe benefits have to be provided by the employer to the employees in the course of such relationship. Accordingly, the Hon ble High Court held that since there was no employer-employee relationship between the taxpayer and the Doctors, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be upheld in view of judgment of Hon'ble Bombay High Court in the case of Tata Consultancy Services Ltd (supra). In the case before the Hon'ble High Court, assessee was engaged in the business of rendering technical consultancy services, marketing of software and hardware products and also export of software. Assessee had claimed expenses on account of payment to one M/s. Tata Sons towards Tata brand equity contribution. The Assessing Officer included such expenditure while computing the value of FBT as according to him it was in the nature of sales promotion. The CIT(A) held that subscription fee could not be treated as falling under the head 'sales promotion' and he allowed the claim of assessee that such amount was not includible for the purposes of FBT. The said stand of CIT(A) was upheld by the Tribunal, which has been affirmed by the Hon'ble High Court. In the said case, it was noticed that expenditure by way of subscription had been incurred in terms of contractual agreement between Tata Consultancy Services Ltd. and Tata Sons and that there was no employer-employee relationship between the two. The Hon'ble High Court observed that the basis of FBT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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