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TMI Blog2014 (1) TMI 439X X X X Extracts X X X X X X X X Extracts X X X X ..... t liable to fringe benefit tax. 3. The assessee is a company engaged in the business of software development. In incurs expenses on sending employees outside India to its branches or subsidiaries or customer locations. The assessee incurs expenses under the head 'Visa charges and others'. The expenses included legalization charges, residence permits, work permits, green card fees, etc. According to the revenue, the aforesaid expenses are covered u/s. 115WB(2)(F) as conveyance, tour and travel (including foreign travel) and liable to be added as fringe benefit for the purpose of levy of fringe benefit tax. Accordingly, the aforesaid expenses were included as part of the fringe benefit while valuing the fringe benefits for levy of FBT. 4. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee and is neither paid to the employees as a consideration for employment, nor are they incurred for the benefit of the employees of the assessee company. 6.2 In the case of M/s. Toyota Kirloskar Motor P. Ltd (supra) the co-ordinate bench of the Tribunal examined the issue as to whether legitimate business expenditure involving payments to third parties and which did not result in any benefit to employees are liable for FBT. After considering the legislative intention in introducing the FBT provisions, the scope of the deeming fiction u/ 115WA(2), CBDT Circular No.8 of 2005, various decisions of Tribunals and Courts, it was concluded that legitimate business expenditure not resulting in any benefit to employees are not l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ." The interview of the Finance Minister which is extracted at para 7.1 of this order also confirmed that legitimate business expenditure is outside the scope of FBT." In para 11.1 of the order, the observations are : "11.1 In the instant case, the expenditure in the nature of sales promotion, conveyance, tour and travel and gifts have no element of employee benefit and is a legitimate business expenditure incurred by the assessee in the course of carrying on its business. The impugned expenditure was paid to third parties and not to employees. In view of the above discussion, we are of the considered opinion that legitimate business expenditure, as in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal attribution of which it is difficult to make. Thus, in our opinion, the deeming fiction under section 115WB(2) is limited to those expenditures which result in collective enjoyment of benefits by the employees and where personal attribution of benefit poses difficulty. It is only under these circumstances that, the deeming fiction under section 115WB(2) comes into play. In a case where the benefit is fully attributable to employees or where the expenditure does not result in any benefit at all to employees, as in the instant case, the deeming fiction under section 115WB(2) is not attracted and consequently, no FBT can be levied on the employer." 6.3 In the instant case, the expenses incurred under the head "Visa Charges an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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