TaxTMI 
TaxTMI 
2011 (10) TMI 194
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....esents to stockist of the company in the nature of 'Gifts' instead of expenses in the nature of sales-promotion including publicity expenses". 2. Brief facts of the case as obtaining from the statements of facts filed before ld.CIT(Appeals) are that Fringe benefits Tax (FBT) return for the assessment year 2006-07 was filed on 23.11.2006 showing taxable value of fringe benefits at Rs.6,52,20,500/- which, inter alia, included presents given to company's stockiest aggregating to Rs. 1,79,88,323/-. While computing the value of Fringe benefits, the value of presents as given to stockiest and dealers were considered as advertising/sales promotion expenses and, accordingly, 20% of such expenses were treated as taxable fringe benefit as per sect....
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....eated as gifts according to Circular No. 8 dated 29.08.2005 of CBDT following answer to Question No. 97 of the Circular. Even though the articles carry the name or logo of the assessee, it is clear from the nature of articles presented that they are in the nature of gifts only. The AO has rightly treated the presents as gifts and taxed 50% of the value as Fringe Benefit Value. I confirm the action of the AO and the ground of appeal is dismissed". 3. Ld. counsel for the assessee reiterated the submissions made before ld. CIT(Appeals) and submitted that since the articles were given according to volume of sales achieved by agents therefore, these articles were given only as per business consideration and not as gift. In course of hearing, ....
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....axable fringe benefit. The assessee has considered the impugned amount under section.115WB(D) whereas AO has considered the same under section. 115WB(O). Keeping in view the business exigency only 20% of the expenditure incurred on sales promotion including publicity has been taken as taxable fringe benefit whereas in case of gifts which are purely given without any consideration out of one's own volition having very little business consideration, 50% of the expenditure on such gifts is being treated as taxable fringe benefit. The legislative intent is also clear from the fact that w.e.f 1-4-08 expenditure on distribution of samples either free of cost or at concessional rate has been excluded from sales promotion and publicity expenses and....
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....re on gifts under trade schemes or for promotion of company's products to distributors/ retailers, falls within the scope of the provisions of clause (O) of sub-section (2) of section 115WB and, accordingly, is liable to FBT. 98. Does a gift to customer fall under 'sales promotion' or 'gift'? Answer: In terms of the rules of interpretation of a statute, a specific provision in law overrides a general provision. Therefore, a gift to a customer, even though for the purposes of sales promotion, would fall within the scope of the specific provision of clause(O) of sub-section (2) of section 115WB relating to gift." From the answer given to question no. 97, it is clear that gift is defined as anything given or presented without consider....