2023 (10) TMI 1280 - HC - Income Tax

Fringe Benefit Tax on Advertisement Expenses: Court Restores CIT(A)'s Decision for Assessment Year 2008-09 Due to Documentation Issues.

The Pr. Commissioner Of Income Tax-4 Versus Hindustan Coca Cola Beverages Pvt. Ltd.

The HC set aside the Tribunal's order concerning the levy of Fringe Benefit Tax (FBT) on advertisement expenses for Assessment Year 2008-09. It restored ... Levy of fringe benefit tax (FBT) on expenditure claimed concerning advertisement - Assessee claimed that it may not be able to produce all bills, as the record was voluminous and maintained in different branches - CIT(A) had arrived at a solution, by giving assessee benefit to the extent that the bills were produced and balance amount [ 50%] was disallowed - HELD THAT:- Even though the Tribunal has given complete benefit of the expenditure claimed by assessee in terms of 115WB read with Section 115WC of the Income Tax Act, 1961 [in short, “the Act”], the respondent/assessee would be quite satisfied if the order of the CIT(A) is sustained instead. As revenue, says that this may perhaps be the best outcome, given the fact that this is the matter which pertains to AY 2008-09 and even if this Court were to remand the matter to the AO, it will be difficult for the respondent/assessee to produce the record. Since substantial number of bills were produced by the respondent/assessee qua which no defect was found, this may be a reasonable outcome in the present appeal. We tend to agree with the submissions made by both parties impugned order is set aside, and instead the order passed by the CIT(A) is restored. Issues involved: Appeal against the order of the Income Tax Appellate Tribunal concerning Assessment Year 2008-09.Levy of Fringe Benefit Tax (FBT) on Expenditure Claimed by the Respondent/Assessee Concerning Advertisement:The Tribunal dismissed the appeal regarding the levy of FBT on expenditure claimed by the respondent/assessee for advertisement, allowing the respondent/assessee's appeal on the same issue. The CIT(A) had disallowed 50% of the advertisement expenses as taxable due to incomplete details provided by the appellant. The respondent/assessee claimed inability to produce all bills due to voluminous records maintained in different branches. The Tribunal upheld the respondent/assessee's claim, setting aside the Tribunal's order and restoring the CIT(A)'s decision.Conclusion:The High Court set aside the Tribunal's order and restored the CIT(A)'s decision regarding the levy of FBT on advertisement expenses claimed by the respondent/assessee. The Court agreed with the appellant/revenue and respondent/assessee's counsels that sustaining the CIT(A)'s order would be a reasonable outcome given the difficulty in producing voluminous records for the Assessment Year 2008-09.