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2024 (2) TMI 1104 - ITAT MUMBAIFringe Benefit Tax (“FBT”) - business promotion expenses treated as fringe benefit accorded by the assessee to its employees - As per the assessee, the expenses debited under the head “Advertisement and Business Promotion” and considered by the AO to be covered u/s 115WB(2)(d) and section 115WB(2)(o) are not incurred on its employees and rather the same has been incurred on the Doctors. HELD THAT:- We find that the assessee filed the details of expenses, vouchers, etc. to substantiate its claim that the Advertisement and Business Promotion expenses are recurring expenditures incurred during the normal course of the business exclusively for the purpose of business. AO after examination and verification of these details on a text check basis stated that the expenses are incurred by field staff for giving various gifts, travel facilities, etc. to the Doctors for promoting the products of the assessee. Therefore, from the aforesaid remand report, it is sufficiently evident that the Revenue has accepted that the expenses under the head CRM/KAM are incurred for the benefit of the Doctors. We find that in Pr.CIT v/s Aristo Pharmaceuticals (P) Ltd., [2020 (1) TMI 1155 - BOMBAY HIGH COURT] after analysing the provisions of section 115WA of the Act held that for levy of FBT, the relationship of employer and employees is the sine qua non and the fringe benefits have to be provided by the employer to the employees in the course of such relationship. Accordingly, the Hon’ble High Court held that since there was no employer-employee relationship between the taxpayer and the Doctors, the expenditure incurred for distributing free samples to the Doctors could not be construed as fringe benefits to be brought within the additional tax net by levy of FBT. Since, in the present case, no material has been brought on record by the Revenue to show that the Doctors were employees of the assessee, therefore, addition made by the AO u/s 115WB(2)(d) and section 115WB(2)(o) of the Act is deleted. Grounds raised by the assessee are allowed.
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