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TMI Blog2020 (1) TMI 1155X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal has been preferred projecting the following questions as substantial questions of law:- (i) Whether on the facts and in the circumstances of the case and in law, Tribunal was right in setting aside the action of the AO without appreciating the fact that the fringe benefit assessment was framed after duly considering the CBDT Circular No. 8/2005 and the Explanatory Notes to the Finance Act, 2005 on the provisions relating to Fringe Benefit Tax.? (ii) Whether on the facts and in the circumstances of the case and in law, Tribunal was right in ignoring the fact that the Tribunal has explained considering the case of E-Skayef Ltd., 245 ITR 116, of the Supreme Court that free medical samples distributed to doctors is in the nature of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l authority; and (v) every artificial juridical person, not falling within any of the aforesaid categories. 8. Adverting to the facts of the present case, it is seen that assessee is a company engaged in pharmaceutical business i.e., in the business of manufacturing of pharmaceutical products of various types. Assessee filed a return of fringe benefit disclosing the value of fringe benefits to the extent of Rs. 5,41,64,140/-. Initial assessment was concluded by the Assessing Officer accepting the return of fringe benefit value as disclosed by the assessee. 9. Thereafter, the case was reopened under Section 115WG of the Act. The assessment was reopened on the ground that distribution of free samples was in the nature of fringe ben ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding of the said Section, it is evident that for levy of fringe benefit tax, it is essential that there must be a relationship between an employer and employees and the fringe benefit has to be provided or deemed to be provided by the employer to his employees. As alluded to herein above, for levy of fringe benefit tax, relationship of employer and employees is the sine qua non and the fringe benefits has to be provided by the employer to the employees in the course of such relationship. 14. In Tata Consultancy Services Ltd (supra), this Court referred to Circular No. 8/2005 of CBDT which indicated that the objective of taxing perquisite of fringe benefit is both on the ground of equity and economic efficiency. Thereafter, this Court held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ducts and also export of software. Assessee had claimed expenses on account of payment to one M/s. Tata Sons towards Tata brand equity contribution. The Assessing Officer included such expenditure while computing the value of FBT as according to him it was in the nature of sales promotion. The CIT(A) held that subscription fee could not be treated as falling under the head 'sales promotion' and he allowed the claim of assessee that such amount was not includible for the purposes of FBT. The said stand of CIT(A) was upheld by the Tribunal, which has been affirmed by the Hon'ble High Court. In the said case, it was noticed that expenditure by way of subscription had been incurred in terms of contractual agreement between Tata Consultancy Serv ..... X X X X Extracts X X X X X X X X Extracts X X X X
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