TMI Blog2015 (6) TMI 932X X X X Extracts X X X X X X X X Extracts X X X X ..... artially a benefit of a personal nature passed on to the employee. But, a legitimate business expenditure not within the ambits of employer & employee relationship is outside the scope of FBT. In view of these observations, we hereby hold that the FBT provisions have wrongly been invoked in the present case. We hereby reverse the legal findings of the authorities below and direct the AO to give relief accordingly. - Decided in favour of assessee. - I.T.A. No.209/Ahd/2012 - - - Dated:- 10-4-2015 - Shri N.S. Saini And Shri Kul Bharat JJ For the Appellant : Shri Sanjay R.Shah, AR For the Respondent : Shri M.K.Singh, Sr.DR ORDER Per Shri Kul Bharat, JUDICIAL MEMBER : This appeal by the Assessee is directed against t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. The CIT(A) ought to have deleted addition in respect of expenditure such as travelling conveyance, telephone mobile expenses, guest house expenses, insurance expenses, entertainment expenses and club membership fees which are business expenditure and cannot be said to be fringe benefit to employees. 7. The CIT(A) ought to have deleted addition in respect of expenses where benefits of expenses are not enjoyed collectively by employees of the company or where no benefits are being enjoyed by any employee in view of speech of Finance Minister Memorandum explaining provisions for Finance Bill, 2005. Your appellant prays for leave to add, to alter and/or to amend all or any of the grounds before the final hearing of appeal. 2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecessor had disposed the appeal for AY 2007-08 with the following detailed finding: 5. A similar appeal of the appellant for assessment year 2006- 07 stands disposed off by the undersigned's order dated 31/12/2009. As per that, it has been held that looking at the arrangement, the so called consultants and the assessee had, these relationships were in the nature of master-servant relationship only and therefore there existed a case for Fringe Benefit Tax. The operative portion of that order is as follows: 2.3. The matter has been considered and I am unable to agree with the Authorised Representative. It is an established proposition that for evaluating whether there is a relationship of employer-employee, i.e. masterservant, one ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case, we have expenses like club payments, employees' welfare expenses or entertainment expenses, among the various expenses covered by the Assessing Officer which clearly point to a situation where the so called consultants have been using the assesseecompany's facilities like any legally termed employee. It needs to be appreciated that in the entire scheme of that pertained to fringe benefit tax the emphasis is on the employer and the expenses incurred by it. If we take the position that for our purpose we have to consider the defacto employee and necessarily de-jure employee, then the various objections raised by the appellant, including the applicability of circular No.8 of 2005 dated August 29, 2005, falls through. 5. Duri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rred by the employer ostensibly for the purpose of business but includes partially a benefit of a personal nature passed on to the employee. But, a legitimate business expenditure not within the ambits of employer employee relationship is outside the scope of FBT. In view of these observations, we hereby hold that the FBT provisions have wrongly been invoked in the present case. WE hereby reverse the legal findings of the authorities below and direct the AO to give relief accordingly. Grounds are allowed. 4.2. The Coordinate Bench in another ITA No.2065/Ahd/2010 in AY 2007-08, order dated 31/05/2013, has followed the decision of the Coordinate Bench passed in ITA No.906/Ahd/2010, by observing as under:- 2. Facts of the case, as em ..... X X X X Extracts X X X X X X X X Extracts X X X X
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