TaxTMI 
TaxTMI 
2013 (5) TMI 371
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.... (a) to (d). The Learned CIT(A) ought to have held that hotel expenses while on travel and motor car expenses which were incurred in the course of official work and brand subscription fees, could not be called as a 'privilege, service facility or amenity', within the meaning of 115 WB (1). Ground No. 2 Without prejudice to Ground No. 1, the learned CIT (A) has erred both in law and on facts in upholding the levy of FBT on expenditure on hotel during travel on the ground that employees have benefited on account of hotel expenses. The Learned CIT(A) ought to have appreciated that there was no element of personal expenses and that the employee had travelled solely for the purpose of company work. Ground No. 3 Without prejudice to Ground No....
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....s not sales promotion and hence it did not get covered under Item D of Section 115 WB (2). Ground No. 8 The learned CIT (A) has erred both on facts and in law in coming to a conclusion that brand subscription fees are liable to FBT since brand subscription fees could be regarded as 'fringe benefit' on account of the fact that employees were ultimately benefited by the activities of the brand promotion and various business promotion activities. The learned CIT (A)'s conclusion was contradictory to the facts and not supported by the terms of the Agreement." Assessee-company, engaged in the business of manufacturing of Gear Boxes and parts, filed its return of Fringe Benefit Tax (FBT) on 30.10.2007 disclosing the value of Fringe Benefit (FB....
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.... was also incurred on employees. He disallowed Rs. 2.69 Lakhs i.e., 20% of the total hotel expenditure u/s. 115 WB (2)(H) of the Act. The next addition to the value of FB was on account of brand subscription expenses. During the year under consideration, company had incurred brand subscription expenses amounting to Rs.25.77 Lakhs. Assessee had not offered the said expenditure for FBT. After considering the submissions of the assessee in this regard, AO added Rs. 5.15 Lakhs i.e., 20% of 25.77 Lakhs to the value of FB. 3. Assessee preferred an appeal before the First Appellate Authority (FAA). After considering the submissions of the assessee, he held that employees were also benefitted on account of hotel expenses and car hire expenses, th....
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....he provisions of FBT. Departmental Representative (DR) relied upon the orders of the FAA and AO. 4. We have heard the rival submissions and perused the material on record. As per the settled law FBT is leviable with regard to the payments that result in some benefit to the employees of the assessee. If the incurred expenditure do not benefit the employee collectively, provisions of FBT cannot be invoked. If on the touchstone of this principle case under consideration is tested it becomes clear that addition made by the AO to the value of the FB cannot be endorsed. Though the AO and the FAA have held that expenses incurred by the assessee under the head hotel expenses and car expenses were incurred for employees, yet they have nowhere refer....