TaxTMI 
TaxTMI 
2015 (5) TMI 518
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....the assessee's appeal and the relevant assessment year is 2007-08. 3. Mr. Suresh Kumar would submit that the question of law which the Revenue has formulated at page 5 of the paper-book is a substantial question of law. He would submit that the Tribunal has failed to notice that the payment made by the assessee of Rs. 27,57,12,999/- as Tata Brand equity contribution can be considered as a fringe benefit. The assessee-company had itself considered this contribution as sales promotion expenses. If the company to which the payment was made organizes the promotional activities and assists the group companies such as the assessee in locating buyers etc., then, that is squarely falling within the purview of the provisions enabling recovery....
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....d by any error of law apparent on the face of the record enabling this Court to entertain the appeal. Therefore, it should be dismissed. 5. What the Revenue highlights before us is a fact that the assessee-company is engaged in the business of rendering technical consultancy services marketing of software and hardware products and also export of software. The assessee company filed its return of income on 29th October, 2007. In the return, the assessee-company claimed expenses and of payment made to M/s. Tata Sons towards Tata Brand equity contribution which the assessee company had included under the head "sales promotion". The assessee-company submitted that Tata Brand equity contribution was not sales promotion and hence should be exc....
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....mputed in accordance with the provisions of this Act, the tax on fringe benefits shall be payable by such employer. By section 115WB, the term "fringe benefits" has been defined to mean any consideration for employment provided by way of privileges, service facility or amenity, any free or concessional tickets, any contribution by the employer to an approved superannuation fund for employees and/or such benefits extended and set out in clauses (a) to (d) of sub-section (1) of that section. By subsection (2) of that section the fringe benefits shall be deemed to have been provided by the employer to his employees, if the employer has, in the course of his business or profession (including any activity whether or not such activity is carried ....
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....evenue, however, when the argument before us is that there is no basis for the conclusion that these benefits and which are taxable arise out of a employer-employee relationship that we were shown the requisite material and produced before the Tribunal. Firstly, the Tribunal had before it the agreement and which had been executed. That is styled as Tata Brand Equity And Business Promotion Agreement dated 19th April, 2004. That is between Tata Sons Limited and the assessee before us. That indicates as to how a new competitive environment created by liberalisation and globalisation of trade and industry has brought about a radical transformation of the business scene and it has become imperative for individual Tata companies wherever and to t....
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....be leviable and chargeable on the amount paid as subscription under this agreement. 7. It is in that context and in the backdrop of such an agreement that the Tribunal referred to the Revenue's circular. The circular which has been carrying forward the object and purpose of introducing and levying such tax denotes that the taxation of perquisites or fringe benefits provided by an employer to his employees, in addition to the perks or wages paid is subject to varying treatment in different countries. These benefits are either taxed in the hands of the employees themselves or the value of such benefits is subject to a fringe benefit tax in the hands of the employer. The rationale for levying a fringe benefit tax on the employer lies in....