TaxTMI 
TaxTMI 
2019 (6) TMI 1177
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....ficer issued notice u/s 115WB(E)(2) r.w.s 142(1) of the Act along with a requisition. The assessee in response to the said notice filed written submissions dated 30.11.2009 wherein it is noted that the assessee offered a sum of Rs. 12,89,407 and Rs. 79,864/- for consideation of determination of value of fringe benefit. Accordingly the Assessing Officer determined the value of fringe benefit at Rs. 35,33,583/- vide its order dated 29.12.2009 passed u/s 115WB(E)(3) of the Act. 4. Aggrieved by order of Assessing Officer, the assessee preferred an appeal before the CIT(A). We find that the assessee submitted that the assessee provides uniform to the staff to perform a special kind of duty while providing services in the hotel premises. Each day the uniform is provided at the beginning of the shift and taken back at the end of the duty hours. This is the custom prevailing in the hotel industry. In the provision of uniform there is no element welfare involved as no benefit flows to the employees by wearing such uniform and it is worn in the hotel only. Further it was submitted vide letter dated 30.11.2009 that in reply to query no, 74 of CBDT Circular No.8/2005 dated 29.08.2005, it wa....
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.... the duty hours and the same is taken back at the end of the duty hours. The employees have no other option but to wear the uniform. 4. ln the hotel industry the employer, in order to create a better ambience, provides the special uniform for protecting/promoting, legitimate business interest. This is a general convention in the hotel industry as a whole. 5. The employee is indifferent to the provision of uniform in the sense that if the employer insists on it and provides it then only he has to wear it. lf the employee is indifferent to something it cannot be said to have any element of employee welfare. 6. ln CBDT Circular No. 8/2005 dated 29.08.2005 in reply to query no. 74, it was clarified that any expenditure incurred to meet employers' statutory obligations under the Employment Standing Orders Act, 1948 would not come under purview of FBT. Because of the unique nature of the hotel industry and the prevailing custom the employer is under obligation to incur expenses on staff uniform. Following the essence of the said circular, uniform allowance should not be considered as 'staff welfare and consequently should not be subject to FBT. 6. The CI....
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.... by the order of CIT(A), the assessee before us contending that the assessee framed standing orders in terms of the provisions contained in section 7 of the Industrial Employment (Standing Orders) Act, 1946 which are covered by the definition of 'Workman' as given under Industrial Disputes Act 1947. The ld. AR further referred to Page No.6 of Paper Book and submitted that every employee at the start of his duty/shift must be present in uniform which is prescribed by the assessee at his appointed place of duty and would not leave at the end of his duty/shift unless he hands over the charge of work properly to his relieving employee. He submits that the assessee supplies uniforms to the employees in accordance with the point no.6 and at the end of the respective duty, the said employee has to leave the said uniform with the assessee. The said employee does not carry the said uniform with him and it rests with the assessee. The said uniform does not grant any welfare to the employee and argued that the supply of uniform and expenditure incurred thereon does not fall under the fringe benefit tax. The assessee referred to an order of this Tribunal in the case of Mercury Car Rentals Priv....
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....ration for employment provided by way of any privilege, service, facility or amenity directly or indirectly provided by employer whether by way of reimbursement or otherwise to its employees is chargeable to fringe benefit tax. As discussed above, we find no welfare is attributed to the employees by providing uniforms by the assessee directly or indirectly. We find it is neither a privileges or services or facilities or amenity provided to the employees by the assessee. Further in the present case, the said uniforms are required or essential to be worn as a condition of employment in terms of Point No.6 vide standing orders which are framed in accordance with section 7 of Industrial Employment (Standing orders) Act 1946. Further the standing orders is applicable to permanent employees and probationers covered under the Industrial Disputes Act 1947. So therefore as rightly pointed out by the ld. AR, there was no welfare appended to the employees of the assessee by providing uniforms. 12. Further we note that the CBDT passed Circular No.8/2005 wherein it clarified to a frequently asked question. At question no.74, it was asked whether MBT is payable on expenditure incurred on p....