2012 (7) TMI 967

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.... Fringe Benefits. 2. The brief facts of the case are that assessee has filed its return of Fringe Benefits, declaring the value of Fringe Benefits at Rs. 1,58,41,527/-. The Ld. Assessing Officer has issued notice u/s 115WE(2) of the Income Tax Act, which was served on the assessee on 30-09-2008. The Assessing Officer, thereafter, issued a detailed questionnaire. 3. It emerges around from the record that assessee company was set up with a view to carry out, inter alia, following business activities:- * To carry on the business of producers, distributors of films, renting of film tapes, advertisers and franchisees of the programs and broadcasts of the Time Warner and Turner Group of Companies. * To carry on the busines....

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....Ld. Assessing Officer has observed that the expenses incurred by the assessee were for the advertisements and therefore, they are in the nature of sales promotions, involving Fringe Benefits in them. He estimated the Fringe Benefits involved in this expenditure at 20 % and worked out the value at Rs. 10,80,000/-. The Assessing Officer in this way, determined the value of Fringe Benefits at Rs. 1,69,21,530/- as against Rs. 1,58,41,527/- disclosed by the assessee. 5. On appeal, Ld. CIT(A) has held that expenses were not incurred for sales promotion, rather it is contractual obligation for telecasting a programme namely 'Cartoon Network Duniya'. This payment made by the assessee does not fall within the ambit of sales promotion in which val....