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2014 (1) TMI 1180 - AT - Income TaxAddition made as fringe benefits u/s 115 WE(3) of the Act – Various expenses made – Held that:- The break-up of expenses grouped under Event Management Expenditure account along with documentary evidences were furnished before the AO as well as the CIT (A) by the assessee -, the CIT (A)-LTU, after analysing the provisions of s. 115 WB (1), 115WB(1)(a) of the Act, was of the view that the nature of expenses claimed make it abundantly clear that such expenses were in the nature of ‘entertainment’ liable to be treated as a deemed benefit u/s 115WB (2)(A) of the Act rather than as expenditure incurred towards conference liable to be taxed u/s 115WB(2)(C) of the Act - none of the expenses were incurred by the assessee to endure any benefit to the employees whatsoever - The entire expenses incurred by the assessee cannot be regarded as FB and, therefore, FBT is not chargeable on the sum - Therefore, the CIT (A) was not justified in invoking the provisions of s. 115 WB(2)(A) of the Act to bring the said sum of Rs.6.47 lakhs under the ambit of FBT. Addition made for staff training – Held that:- The authorities below have justified in their stand that the expenses as part of ‘employee welfare’ u/s 115WB(2)(E) of the Act – However, they have failed to appreciate that the expression of ‘welfare’ in general parlance would mean the health, fortunes of a person or a group - they have failed to justify that the staff training falls within the sphere of ‘employee welfare’ - The purpose of providing training to its employees by its employer was to perform their official duties efficiently which will definitely enhance the productivity thereby the ultimate beneficiary would be the employer in carrying on its business more effectively and not the employees - If the purpose of incurring the expenses was to protect the employer’s business interest and not the welfare of the employees and, as such, it cannot be termed as employees’ welfare - These aspects have neither been considered by the AO nor by the CIT (A) - the comprehensive details of expenses incurred for the staff training have neither been furnished before the authorities below nor during the course of hearing before the Bench by the assessee to ascertain as to whether the assessee’s claim that such expenses were not liable to FBT – thus, the matter remitted back to the AO for fresh adjudication – Decided partly in favour of Assessee.
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