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2013 (1) TMI 722 - ITAT MUMBAIFringe benefit tax on free/concessional tickets issued to the employees for private journeys - Held that:- As it is not in dispute that the assessee has provided free/concessional tickets to its employees during the year under consideration, it is liable for fringe benefit tax. Though section 115WC(2)(a) contains the provisions for computing the cost of such benefit but in our considered view that method cannot be applied to the facts of the present case for the simple reason that the cost at which the benefits are provided to the employee cannot be equated with the cost provided by the employer to the general public. To this extent, we agree with the submissions of the counsel that the nearest available, logical and acceptable method is to value the benefit as per the cost assigned for provisions for the frequent flyer programme in the books of account. More so, because such provision has been accepted by the Department in the assessee' s own case from the assessment year 1999-2000 till assessment year 2005-06 and as this method is scientific and has attained finality in due course of time since the assessment year 1999-2000, keeping in mind that the members of the frequent flyer programme scheme are from the general public. Thus restore this issue back to the files of the Assessing Officer who directed to value the fringe benefit of free/concessional tickets as per the valuation of frequent flyer programme as provided by the assessee in its books of account at ₹ 446.06 as the same has also been accepted by the Department while making provisions for " frequent flyer programme" for earning JP mileage, and if there are costs for foreign travels the same should be eliminated from the same, thereafter, the Assessing Officer is also directed to reduce the cost recovered from the employees. Direct the Assessing Officer to verify from the special auditor' s report about the actual figure of the tickets issued. Needless to mention, the Assessing Officer must compute the value of fringe benefit by adopting the correct number of tickets issued to the cost computed in the case of frequent flyer programme. The assessee is directed to furnish the details of the amount recovered from the employees towards the cost/concession/free tickets. The Assessing Officer is directed to reduce the value of the fringe benefit to the extent of the cost of benefit recovered by the assessee from its employees - Decided in favour of assessee for statistical purposes. Charge of fringe benefits tax on festival expenses - Held that:- There is no employer- employee relationship between the payer (assessee) and the recipient. Therefore, we have no hesitation in holding that no fringe benefits tax is leviable on these expenses. Finding of the learned Commissioner of Income-tax (Appeals) are accordingly reversed. - Decided in favour of assessee. Fringe benefits tax on insurance expenses - Held that:- The assessee has not submitted any details before the lower authorities to substantiate its claim. Therefore, in the interest of justice and fair play, we restore this issue back to the files of the Assessing Officer. The assessee is directed to substantiate its claim that such insurance premium is a statutory liability by bringing cogent material evidence. - Decided in favour of assessee for statistical purposes. Fringe benefits tax on trade display expenses as being in the nature of gift - Held that:- As the employer/employee relationship is a pre-requisite for the levy of fringe benefits tax and after considering the details of trade display expenses, in our humble opinion the gift items have been given to the travel agents/customers with whom the assessee does not enjoy employer-employee relationship. Accordingly, the levy of fringe benefits tax on this count is deleted - Decided in favour of assessee. Fringe benefits tax on per diem expenditure - Held that:- As the assessee itself has offered the per diem expenses for fringe benefits tax under the category " tour and travel" . Since the assessee itself has offered per diem expenses for fringe benefits tax in the assessment year 2008-09, we do not find any reason why the same should not be offered for the year under consideration. - Decided in favour of assessee.
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