TMI Blog2020 (10) TMI 92X X X X Extracts X X X X X X X X Extracts X X X X ..... the purposes of business for scientific tenures and not to move around the country for sight seeing. Expenditure under the head tours and travels is normally recurring in nature but, in the instant case, the employees of the assessee had not under taken frequent tours and travels. The expenses have been incurred for visa charges to make the employees eligible to undertake an entry to foreign country and stay at the work place in that country. Expenditure has been incurred for business necessity and not for providing any domestic benefit or amenity to the employee. The payment for visa and other charges are statutory obligations and fringe benefit tax cannot be levied - Aforesaid charges have not been paid as consideration for paymen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ards visa charges and others as per Section 115WB(2)(F) 115WB(2)(q) of the Act? 2. Facts leading to filing of the appeal briefly stated are that the assessee is engaged in the business of software development. The assessee filed the return of fringe benefits on 29.11.2006 for Assessment Year 2005-06 and the value of fringe benefits was shown to be ₹ 33,42,28,988/-. The return was processed under Section 115WE(1) and notice was issued to the assessee. The return of assessee was selected for scrutiny. The Assessing Officer, by an order dated 31.12.2008, made an addition of ₹ 3,82,55,579/- towards value of fringe benefits in respect of visa charges and others and determined assessable fringe benefit at ₹ 46,11,72,389/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o not give any personal benefit to the employee and therefore, would not constitute fringe benefit is incorrect. It is also contended that sub- Section(1) and sub-Section (2) of Section 115WA have to be read separately and sub-Section (2) expands the scope of sub-Section (1). In support of aforesaid submissions, reliance has been placed on decision of the Supreme Court in R B FALCON (A) PTY. LTD. Vs. COMMISSIONER OF INCOMETAX (2008) 301 ITR 309 (SC) and the decision of the Gujarat High Court in GUJARAT CHAMBER OF COMMERCE INDUSTRY Vs. UNION OF INDIA (2017) 395 ITR 457 (GUJARAT). 4. On the other hand, learned counsel for the assessee submitted that the fringe benefit tax was introduced in the year 2006 and the same was wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er submitted that if there is an ambiguity in the provision then the speech of the Finance Minister in the Parliament can be taken as an external aid and since, there is no ambiguity in the provision, the speech of the Finance Minister is of no relevance in the facts of the case. 6. We have considered the submissions made by learned counsel for the parties and have perused the record. The object of levy of fringe benefit tax is discernable from the memorandum, which provides that rationale for levying a fringe benefit tax on the employer lies in inherent difficulty in isolating the personal element where there is collective enjoyment of such benefits and attributing the same directly to the employee, this is so especially where the expen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther than cash for providing know-how or making available rights in the nature of intellectual property rights or value additions, by whatever name called. (2) The fringe benefits shall be deemed to have been provided by the employer to his employees, if the employer has, in the course of his business or profession (including any activity whether or not such activity is carried on with the object of deriving income, profits or gains) incurred any expense on, or made any payment for, the following purposes, namely:- (A) xxxxx (B) xxxxx (C) xxxxx (D) xxxxx (E) xxxxx (F) conveyance; (Q) tour and travel (including foreign travel). (3) For the purposes of sub-section (1), the privilege, service, facil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g. The expenditure under the head tours and travels is normally recurring in nature but, in the instant case, the employees of the assessee had not under taken frequent tours and travels. The expenses have been incurred for visa charges to make the employees eligible to undertake an entry to foreign country and stay at the work place in that country. Therefore, the expenditure has been incurred for business necessity and not for providing any domestic benefit or amenity to the employee. The payment for visa and other charges are statutory obligations and fringe benefit tax cannot be levied. It is also pertinent to note that the aforesaid charges have not been paid as consideration for payment and therefore, the same cannot be subjected to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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