Income Tax Appellate Tribunal - MumbaiTata Chemicasl Ltd, Mumbai vs Department Of Income Tax on 29 November, 2012IN THE INCOME TAX APPELLATE TRIBUNAL
                         "E" Bench, Mumbai

                Before Shri D. Manmohan, Vice President
            and Shri D. Karunakara Rao, Accountant Member

                         ITA No. 8404/Mum/2011
                         (Assessment Year: 2008-09)

       A C I T - 2 (3)                    M/s. Tata Chemicals Ltd.
       Room No. 556, 5th Floor        Vs. Bombay House
       Aayakar Bhavan, M.K. Road          24 Homi Mody Street
       Mumbai 400020                      Mumbai 400001
                                          PAN - AAACT 4059 M
                Appellant                        Respondent

                    ITA No. 1819 & 1730/Mum/2011
                  (Assessment Years: 2007-08 & 2006-07)

       D C I T - 2 (3)                    M/s. Tata Chemicals Ltd.
       Room No. 555, 5th Floor        Vs. Bombay House
       Aayakar Bhavan, M.K. Road          24 Homi Mody Street
       Mumbai 400020                      Mumbai 400001
                                          PAN - AAACT 4059 M
                Appellant                        Respondent

                   Appellant by:     Ms. Girija Dayal
                   Respondent by:    Shri Dinesh Vyas

                   Date of Hearing:       29.11.2012
                   Date of Pronouncement: 29.11.2012

                                 ORDERPer D. Manmohan, V.P.

     These three appeals, filed at the instance of the Revenue, involve
identical issue and therefore we proceed to dispose of the same by a
combined order for the sake of convenience.2.    At the outset it may be noticed that the appeal pertaining to A.Y.
2008-09 was listed for hearing on 26.11.2012 wherein the following ground
was urged before us:"1. On the facts and in the circumstances of the case and in law, the
         learned CIT(A) erred in holding that sales promotion expense of
         Rs.2.27 cr. cannot be charged under FBT without appreciating2                  ITA No. 8404/Mum/2011M/s. Tata Chemicals Ltd.that sales promotion expenses is to be included in the value of
          taxable fringe benefits as providedu/s. 115WB(2)of the I.T.
          Act."3.     The impugned order of the CIT(A) reads as under: -"1. The appeal pertains to addition of `2,27,06,318/- of fringe
      benefit with respect to sales of promotion expenses paid to Tata Sons
      Ltd. This issue is covered in favour of the appellant by the orders of
      my Ld. Predecessor for A.Ys. 2006-07 & 2007-08 dated 29.12.2010,
      as per Para 4 to 4.9 and Para 5 to 5.2, Pages 1 to 11 of the order of
      A.Y. 2007-08 and identical order passed for A.Y. 2006-07. Following
      the same, the appeal is allowed."4.     Having regard to the fact that no details were found in the impugned
order the Bench was of the opinion that this requires be clubbed alongwith
the appeals pertaining to A.Y. 2006-07 and A.Y. 2007-08, for which the
learned D.R. as well as the learned counsel for the assessee agreed and
accordingly the appeals pertaining to the earlier assessment years were
called for. Registry accordingly placed the two appeal sets, which are
numbered as ITA 1730/Mum/2011 (2006-07) and ITA No. 1819/Mum/2011
(2007-08). Here also the ground urged before the Tribunal was verbatim the
same except for the fact that there is variation in the amounts disallowed.5.     We have heard the learned counsel for the assessee as well as the CIT-
DR.6.     The case of the assessee is that identical issue was decided in favour
of the assessee by the ITAT Mumbai Benches in the following two cases: -1. ACIT vs. H V Transmission Ltd. ITA No. 7927/Mum/2010 dated
        09.11.20122. DCIT vs. Tata Asset Management Ltd. ITA No. 2735 & 2736/Mum/
        2011 dated 25.04.2012.7.     The case of the AO was that the assessee paid to Tata Sons Ltd.
towards subscription for the use of TATA name, marks and marketing indica
in respect of the company's products and services, which was treated by the
assessee as sales promotion expenditure but it was not considered for
calculating deemed fringe benefit. He therefore took the amount paid by the
assessee company for the purpose of computing deemed fringe benefit under3                 ITA No. 8404/Mum/2011M/s. Tata Chemicals Ltd.section 115WBof the Act. The first appellate authority observed thatsection
115WAwhich deals with "charge of fringe benefits tax" speaks of levying tax
in respect of fringe benefits provided or deemed to have been provided by an
employer to his employees..................... In other words the scheme of fringe
benefits tax focuses on payments resulting in some benefits to the
employees of the assessee whereas in the present case the agreement is with
Tata Sons Ltd., who is not an employee of the assessee company. Looking at
the intention of the Legislature, the learned CIT(A) observed that FBT should
not be levied in the instant case since it is restricted to payments which
benefit an employee directly or indirectly. In the present case the impugned
payment did not result in any such benefit and hence the same cannot be
held exigible to FBT. Further aggrieved Revenue is in appeal before us.8.    Both the parties agreed that the facts and circumstances are identical
in all the three years and the fact remains that the assessee made payments
to Tata Sons Ltd., which is the proprietor of the brand name and logo of
TATA. Therefore, the payment cannot be stated to have been made to any
employee of the assessee company. Under identical circumstances the ITAT
Mumbai Benches in the aforementioned cases held that fringe benefits tax is
not leviable under such circumstances. By respectfully following the
aforementioned decisions and considering the facts of the case, we are of the
view that the order passed by the learned CIT(A) do not call for any
interference. Therefore we uphold the order passed by the learned CIT(A)
and dismiss the appeals filed by the Revenue.9.    In the result, appeals filed by the Revenue are dismissed.Order pronounced in the open court on 29th November, 2012.Sd/-                                   Sd/-
        (D. Karunakara Rao)                       (D. Manmohan)
        Accountant Member                         Vice President

Mumbai, Dated: 29th November, 20124                 ITA No. 8404/Mum/2011M/s. Tata Chemicals Ltd.

Copy to:

   1.   The   Appellant
   2.   The   Respondent
   3.   The   CIT(A) - 6, Mumbai
   4.   The   CIT- 2, Mumbai City
   5.   The   DR, "E" Bench, ITAT, Mumbai

                                                      By Order

//True Copy//
                                                   Assistant Registrar
                                           ITAT, Mumbai Benches, Mumbai
n.p.