Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2012 (6) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2012 (6) TMI 484 - AT - Income TaxFringe benefit - exclusion of expenditure incurred on Sales promotion, Conveyance, tour and travel, and Gifts while computation of vale of fringe benefits on ground of no employer - employee relationship - Revenue instead relying on deeming fiction given u/s 155WB - Held that:- Aforesaid expenditure has no element of employee benefit and is a legitimate business expenditure incurred in the course of carrying on its business. The impugned expenditure was paid to third parties and not to employees. Hence, legitimate business expenditure, which does not result in any benefit to employees, is not liable for FBT. Further, CBDT Circular NO.8 of 2005 which specifies that expenditure even if not resulting in any benefit to employees is liable for FBT, cannot be relied upon to the disadvantage of the assessee since it is settled principle that circulars are not binding on the assessee, appellate authorities and the Courts. The proviso to section 119(1) states that no orders, instructions or directions shall be issued by the CBDT so as to require any income tax authority to make a particular assessment or dispose of a particular case in a particular manner so as to interfere with the discretion of the CIT(A) in the exercise of his appellate functions. Expenditure incurred on souvenir distributed to employees on the occasion of decennial celebration - assessee contended them to be in the nature of ‘Employee Welfare’ and not ‘Gifts’ - Held that:- Distribution of Souvenirs was made in consideration of and to recognize the efforts and contribution of employees. Thus, said expenditure cannot be regarded as ‘Gifts.’ and has been correctly treated as ‘employee welfare expenditure
|