2013 (6) TMI 516

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..... brand equity contribution. 3. The facts of the case are that for the year under consideration, the return of fringe benefit was foiled on 29.10.2007 declaring total value of fringe benefits at Rs. 50,51,16,878/-. The case was selected for scrutiny assessment and statutory notices were accordingly issued and served upon the assessee. 4. The assessee company is engaged in the business of manufacturers of computer hardware, software, consultancy and I.T. enabled services. During the course of FBT proceedings, the Assessing Officer observed that the assessee has claimed expenses of Rs. 27,57,12,999/- being paid to M/s. Tata Sons towards Tata Brand equity contribution which the assessee has included under the account head "sales promotion". Du .....

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..... . 6. The Revenue is before us against the findings of Ld. CIT(A). Ld. Departmental Representative supported the FBT order and submitted that the assessee itself has shown these expenses under the head 'business promotion' and publicity not only in the original return but also in the revised return filed on 10.2.2009, therefore there is no error in the finding of AO and pleaded that the same should be confirmed. 7. The Ld. Counsel for the assessee argued that the payment made to Tata Sons Ltd. is towards subscription fees not covered under sales promotion and publicity. Further the contribution as subscription is linked to profitability. No subscription is payable if the subscriber's business becomes unprofitable. The Ld. Counsel drew our .....

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..... this Bench has held that employer/employee relationship is a pre-requisite for the levy of FBT. Rationale for introduction of FBT is that it is difficult to isolate the "personal element" if the benefits are collectively enjoyed by the people which means that the provisions of FBT will be applicable only in respect of those expenses which contain or atleast are likely to contain an element of personal benefit to employees. We do not find any such thing present on the facts of the present case. The subscription amount has been paid as per contractual agreement between the assessee and M/s. Tata Sons Ltd. The invoice raised by M/s. Tata Sons Ltd. is for the services provided for it. As no employer/employee relationship exists between the ass .....

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