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2012 (6) TMI 137 - AT - Income TaxTreatment of prepaid expenses under FBT - Revenue contested that prepaid expenses to superannuation fund should be charged under FBT considering section 115WB(2) – Held that:- The assessee declared fringe benefit value of Rs. 32,76,478/- towards contribution to superannuation funds which was the actual amount debited to P&L Account - the CBDT in Circular No.8/2005 dated 29/8/2005 had made it clear that FBT would be payable in the year in which the expenditure is incurred and would not be payable on payment of advance towards expenses to be incurred in the future - though a contribution of Rs. 42,40,926/- was made during the previous year only a sum of Rs.33,13,584/- related to contribution related to previous year relevant to A.Y 2006-07 and the remaining sum was a pre-paid contribution to superannuation fund the CIT(A)'s Order cannot be considered at default – against revenue. Treatment of sales promotion expenses under FBT - Revenue contested that expenses on account of sales promotion to be charged under FBT as provided u/s. 115WB(2) – Held that:- The payment has been made for business promotion to another group company - the charge to FBT is dependent on enjoyment of benefit collectively by the employees as clarified by CBDT’s circular No.8 dated 29.08.2005 which is totally missing in the present case of brand equity payment and hence cannot be subjected to FBT – against revenue.
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