Fringe benefit tax not attracted to contractual brand equity contribution absent employer-employee relationship

Fringe benefit tax under Chapter XII-H applies only to benefits or perquisites provided or deemed to be provided by an employer to employees. A contractual payment made under a brand equity scheme, where the record showed no employer-employee relationship, was therefore not chargeable to fringe benefit tax. The Tribunal's finding on the absence of such a relationship was supported by the evidence and was neither perverse nor contrary to law, so the Revenue's challenge also failed to raise any substantial question of law.

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Issues: Whether the payment made as Tata Brand Equity contribution was liable to fringe benefit tax in the absence of an employer-employee relationship and whether the appeal raised any substantial question of law.

Analysis: Fringe benefit tax under Chapter XII-H of the Income-tax Act, 1961 is attracted to benefits or perquisites provided or deemed to have been provided by an employer to employees. On a reading of the agreement and the surrounding material, the payment was made under a contractual arrangement for subscription to a brand equity scheme and not as a benefit flowing from employment. The Tribunal's finding that there was no employer-employee relationship was supported by the record and was neither perverse nor contrary to law. The Court also found that the Revenue's challenge did not disclose any substantial question of law.

Conclusion: The payment was not chargeable to fringe benefit tax, and the Revenue's appeal failed to raise any substantial question of law.

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