ICICI PRUDENTIAL LIFE INSURANCE COMPANY LTD, MUMBAI V. ACIT CIR 6(1), MUMBAI

ITA 8817/MUM/2010

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1722 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-02-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: I
• Next Hearing Date: 29-10-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 16-12-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P K SHUKLA
• Assessee Lawyers: ARATI VISANJI
• Keywords: Gift; Depreciation; Business expenditure; Question of law

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL I BENCH, MUMBAI BEFORE RAJENDRA SINGH(AM) & SHRI SANJAY GARG(JM) I.T.A. NO. 8817/MUM/2010 (ASSESSMENT YEAR : 2006-07) ICICI PRUDENTIAL LIFE INSURANCE COMPANY LTD. 1089, APPASAHEB MARATHE MARG PRABHADEVI MUMBAI-400025. VS. ACIT, CIRCLE 6(1) R.NO. 506, 5 TH FLOOR AAYAKAR BHAVAN M.K.ROAD MUMBAI PAN/GIR NO. AAACI7351P (APPELLANT) .. (RESPONDENT) I.T.A. NO. 8939/MUM/2010 (ASSESSMENT YEAR : 2006-07) ACIT, CIRCLE 6(1) R.NO. 506, 5 TH FLOOR AAYAKAR BHAVAN M.K.ROAD MUMBAI VS. ICICI PRUDENTIAL LIFE INSURANCE COMPANY LTD. 1089, APPASAHEB MARATHE MARG PRABHADEVI MUMBAI-400025. PAN/GIR NO. AAACI7351P (APPELLANT) .. (RESPONDENT) ASSESSEE BY : SMT. ARATI VISANJI DEPARTMENT BY: SHRI P.K. SHUKLA DATE OF HEARING : 17.1.2013 DATE OF PRONOUNCEMENT : 15.2.2013 O R D E R PER SANJAY GARG (JM) : 1. THESE TWO APPEALS, ONE FILED BY THE ASSESSEE (ITA N O. 8817/MUM/2010) AND THE OTHER FILED BY THE REVENUE (ITA NO. 8939/MUM/20 10) ARE DIRECTED AGAINST THE ORDER OF LEARNED CIT(A) DATED 29.9.2010 PARTLY ALLOWING THE APPEAL OF THE ASSESSEE AGAINST THE ASSESSMENT ORDER DATED 31.12.2008 FOR A.Y. 2006-07 RELATING TO FRINGE BENEFIT TAX. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, A LIFE INSURANCE COMPANY, FILED ITS RETURN FOR FRINGE BENEFIT FOR A.Y. 2006-07 DECLARIN G TOTAL VALUE OF FRINGE BENEFIT AT RS. ICICI PRUDENTIAL LIFE INSURANCE COMPANY LTD. 2 18,59,40,850/-. THE ASSESSING OFFICERVIDE ORDER DAT ED 31.12.2008 PASSED U/S. 115WE(3) OF THE INCOME TAX ACT HELD THAT THE FOLLOW ING EXPENSES CLAIMED BY THE ASSESSEE AS EXEMPT WERE INFACT LIABLE TO BE SUBJEC TED TO FRINGE BENEFIT TAX :- A SALES PROMOTIONS RS. 3,79,14,000 B ADVERTISEMENT SPONSORSHIP RS. 89,000 C INCENTIVE AND CONFERENCE RS. 4,77,86,000 D FINANCIAL CHARGES OTHER RS. 4,000 E AGENTS RETRAINING RS. 6,000 F AGENTS SALES MATERIAL RS. 3,06,00,000 G AGENTS TRAINING RS. 1,56,80,000 RS. 13,20,79,000 THE ASSESSING OFFICER THUS INCLUDED THE ABOVE AMOUN T IN THE VALUE OF FRINGE BENEFIT AND 20% THEREOF AS PROVIDED U/S. 115WE WAS COMPUTED TO BE LIABLE FOR FRINGE BENEFIT TAX WHICH WORKED OUT AT RS. 2,64,15,800/- AND AS S UCH ADDED THE SAME TO THE VALUE OF FRINGE BENEFIT. AGGRIEVED AGAINST THE ORDER OF T HE ASSESSING OFFICER, THE ASSESSEE FILED APPEAL BEFORE LEARNED CIT(A). LEARNED CIT(A) AFTER CONSIDERING SUBMISSIONS OF THE LEARNED AR DELETED SOME OF THE ADDITIONS MADE UNDE R CERTAIN HEADS I.E. UNDER THE HEAD ADVERTISEMENT SPONSORSHIP EXPENSES AMOUNTING TO RS. 89,000/- HOLDING THAT THE SAME WERE ON ACCOUNT OF PARTICIPATION FEE FOR C ONFERENCE FOR EMPLOYEE AND THUS WERE LIABLE TO BE EXCLUDED AS PER CLAUSE (C) OF SEC TION 115WE(2),FURTHER UNDER THE HEAD INCENTIVE AND CONFERENCE AMOUNTING TO RS. 4, 77,86,000/- AND FINANCIAL CHARGES AMOUNTING TO RS. 4,000/- TREATING THEM AS INCENTIVE TO AGENTS AND NORMAL ORDINARY BUSINESS EXPENSES. HOWEVER, ADDITIONS MADE BY THE ASSESSING OFFICER UN DER THE REMAINING HEADS WERE CONFIRMED BY LEARNED CIT(A). THE ASSESSEE IS T HUS IN APPEAL BEFORE US CHALLENGING SUBJECTION OF THE FOLLOWING EXPENSES TO FRINGE BENEFIT TAX :- A) SALES PROMOTION RS. 3,79,14,000/- B) AGENTS RETRAINING RS. 6,000/- C) AGENTS SALES MATERIAL RS. 3,06,00,000/- D) AGENTS TRAINING RS. 1,56,80,000/- TOTAL RS. 8,42,00,000/- REVENUE IS ALSO IN APPEAL AGAINST THE DELETION OF E XPENSES BY THE LEARNED CIT(A) UNDER THE FOLLOWING HEAD: A) INCENTIVE AND CONFERENCE AMOUNTING TO RS. 4,77,8 6,000/- ICICI PRUDENTIAL LIFE INSURANCE COMPANY LTD. 3 3. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF THE PARTIES AND ALSO GONE THROUGH THE MATERIAL ON RECORD. 4. LEARNED AR HAS RELIED UPON THE CBDT CIRCULAR NO. 8 OF 2005 DATED 29.8.2005 CLAIMING THE SAID EXPENSES TO BE EXEMPT. SHE HAS FU RTHER SUBMITTED THAT THE EXPENDITURES AS CLAIMED IN HER GROUNDS OF APPEAL AR E ORDINARY BUSINESS EXPENSES IN THE SHAPE OF ADVERTISEMENT INCLUDING PRINTING OF PR ODUCT BROCHURE, FORMS, TRAINING AND INCENTIVE AND PROVIDING OF SALES LITERATURE ETC . TO THE AGENTS. SHE HAS FURTHER SUBMITTED THAT THE AGENTS ARE NOT EMPLOYEES OF THE INSURANCE COMPANY AND HENCE ANY EXPENSES INCURRED IN RELATION TO INCENTIVES, TRAINI NG AND MARKETING MATERIAL TO AGENTS DO NOT FALL WITHIN THE PURVIEW OF THE PROVISIONS OF SECTION 115WB OF THE INCOME TAX ACT. NO BENEFIT HAS BEEN DERIVED OUT FROM THE ABOVE EXPENDITURE TO ANY EMPLOYEE OR OTHER INDIVIDUAL.SHE HAS FURTHER RELIED UPON AN AUT HORITY OF THE CO-ORDINATE BENCH OF THE ITAT AT BANGALORE STYLED AS M/S. TOYOTA KIRLOSK AR MOTOR PVT. LTD. VS. ADDL. CIT, LTU BANGALORE (ITA NOS. 20/BANG/2011 & 88/BANG/2011 DATED 11.5.2011). SHE HAS FURTHER RELIED UPON AN AUTHORITY OF THE PUNE BENCH OF ITAT STYLED AS INTERVALVE (INDIA) LTD. VS. ADD. CIT (2012)[77 DTR (PUNE)(TRIB) 113]. 5. ON THE OTHER HAND LEARNED DEPARTMENTAL REPRESENT ATIVE HAS SUBMITTED THAT THE ABOVE EXPENSES ARE DIRECTLY COVERED U/S. 115WB( 2) AND ARE LIABLE TO FRINGE BENEFIT TAX. HE HAS ALSO RELIED UPON THE CBDT CIRCULAR NO. 8 OF 2005 DATED 29.8.2005 6. TWO MOOT QUESTIONS BEFORE US ARE THAT (I) WHETHER THE EXISTENCE OF EMPLOYER AND EMPLOYEE RELATIONSHIP AND ELEMENT OF EMPLOYEE BENEFIT IS NEC ESSARY FOR SUBJECTING THE EXPENDITURE UNDER DIFFERENT HEAD S AS LISTED U/S. 115WB(2) TO FRINGE BENEFIT TAX; AND (II) WHETHER THE AGENTS ARE THE THIRD PARTIES AND THE EX PENSES INCURRED IN PROVIDING INCENTIVES, TRAINING ETC. TO THE AGENTS, BEING THIRD PARTIES, ARE NOT LIABLE TO BE SUBJECTED TO FRINGE BENEFIT TAX. OUR FINDINGS IN THIS RESPECT ARE AS UNDER :- 7. CHAPTER XIIH OF THE ACT CREATING ADDITIONAL TAX LIABILITY ON THE PRESCRIBED ASSESSEES IN THE FORM OF FBT WAS INSERTED BY THE FI NANCE ACT, 2005 WITH EFFECT FROM 1.4.2006. SECTION 115WA OF THE ACT PRESCRIBES THAT IN ADDITION TO THE INCOME-TAX ICICI PRUDENTIAL LIFE INSURANCE COMPANY LTD. 4 CHARGEABLE UNDER THE ACT, THERE SHALL BE CHARGED FO R EVERY ASSESSMENT YEAR COMMENCING ON OR AFTER 1.4.2006, A FBT AT A SPECIFI ED RATE ON THE VALUE OF THE FRINGE BENEFITS PROVIDED OR DEEMED TO HAVE BEEN PROVIDED B Y AN EMPLOYER TO HIS EMPLOYEES DURING THE RELEVANT PREVIOUS YEAR. SECTION 115WB OF THE ACT DESCRIBES THE FRINGE BENEFITS WHICH ARE LIABLE FOR CHARGE OF FBT AS PRES CRIBED IN SECTION 115WA OF THE ACT. SUB-SECTION (1) OF SECTION 115WB PRESCRIBES THAT F OR THE PURPOSES OF THIS CHAPTER, FRINGE BENEFITS MEANS ANY CONSIDERATION FOR EMPLO YMENT PROVIDED BY WAY OF------. THE PRESENCE OF THE EXPRESSION ANY CONSIDERATION F OR EMPLOYMENT IS SIGNIFICANT IN SECTION 115WB(1), INASMUCH AS THE BENEFITS BY WAY O F CLAUSES (A) TO (D) LISTED THEREIN ARE DIRECTED TOWARDS THE EMPLOYEES OR THEIR FAMILIE S INCLUDING FORMER EMPLOYEES. SUB-SECTION (2) OF SECTION 115WB, WHICH IS THE FOCU S OF CONTROVERSY BEFORE US READS AS UNDER : (2) THE FRINGE BENEFITS SHALL BE DEEMED TO HAVE BE EN 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 SU CH ACTIVITY IS CARRIED ON WITH THE OBJECT OFDERIVING INCOME, PROFITS OR GAINS) INC URRED ANY EXPENSE ON, OR MADE ANY PAYMENT FOR,THE FOLLOWING PURPOSES, NAMELY:- (A) ENTERTAINMENT; (B) PROVISION OF HOSPITALITY OF EVERY KIND BY THE E MPLOYER TO ANY PERSON, WHETHER BY WAY OF PROVISION OF FOOD OR BEVERAGES OR IN ANY OTHER MANNER WHATSOEVER AND WHETHER OR NOT SUCH PROVISION IS MAD E BY REASON OF ANY EXPRESS OR IMPLIED CONTRACT OR CUSTOM OR USAGE OF T RADE BUT DOES NOT INCLUDE (I) ANY EXPENDITURE ON, OR PAYMENT FOR, FOOD OR BEV ERAGES PROVIDED BY THE EMPLOYER TO HIS EMPLOYEES IN OFFICE OR FACTO RY; (II) ANY EXPENDITURE ON OR PAYMENT THROUGH PAID VOU CHERS WHICH ARE NOT TRANSFERABLE AND USABLE ONLY AT EATING JOINTS O R OUTLETS; [(III) ANY EXPENDITURE ON OR PAYMENT THROUGH NON-TR ANSFERABLE PRE- PAID ELECTRONIC MEAL CARD USABLE ONLY AT EATING JOI NTS OR OUTLETS AND WHICH FULFILS SUCH OTHER CONDITIONS AS MAY BE PRESC RIBED] (C) CONFERENCE (OTHER THAN FEE FOR PARTICIPATION BY THE EMPLOYEES IN ANY CONFERENCE). ICICI PRUDENTIAL LIFE INSURANCE COMPANY LTD. 5 EXPLANATION.FOR THE PURPOSES OF THIS CLAUSE, ANY E XPENDITURE ON CONVEYANCE, TOUR AND TRAVEL (INCLUDING FOREIGN TRAV EL), ON HOTEL, OR BOARDING AND LODGING IN CONNECTION WITH ANY CONFERENCE SHALL BE DEEMED TO BE EXPENDITURE INCURRED FOR THE PURPOSES OF CONFERENCE ; (D) SALES PROMOTION INCLUDING PUBLICITY: PROVIDED THAT ANY EXPENDITURE ON ADVERTISEMENT, (I) BEING THE EXPENDITURE (INCLUDING RENTAL) ON ADV ERTISEMENT OF ANY FORM IN ANY PRINT (INCLUDING JOURNALS, CATALOGUES OR PRICE LISTS) OR ELECTRONIC MEDIA OR TRANSPORT SYSTEM; (II) BEING THE EXPENDITURE ON THE HOLDING OF, OR TH E PARTICIPATION IN, ANY PRESS CONFERENCE OR BUSINESS CONVENTION, FAIR OR EXHIBITI ON; (III) BEING THE EXPENDITURE ON SPONSORSHIP OF ANY S PORTS EVENT OR ANY OTHER EVENT ORGANISED BY ANY GOVERNMENT AGENCY OR TRADE A SSOCIATION OR BODY; (IV) BEING THE EXPENDITURE ON THE PUBLICATION IN AN Y PRINT OR ELECTRONIC MEDIA OF ANY NOTICE REQUIRED TO BE PUBLISHED BY OR UNDER ANY LAW OR BY AN ORDER OF A COURT OR TRIBUNAL; (V) BEING THE EXPENDITURE ON ADVERTISEMENT BY WAY O F SIGNS, ART WORK, PAINTING, BANNERS, AWNINGS, DIRECT MAIL, ELECTRIC S PECTACULARS, KIOSKS, HOARDINGS, BILL BOARDS [, DISPLAY OF PRODUCTS] OR B Y WAY OF SUCH OTHER MEDIUM OF ADVERTISEMENT; [***] (VI) BEING THE EXPENDITURE BY WAY OF PAYMENT TO ANY ADVERTISING AGENCY FOR THE PURPOSES OF CLAUSES (I) TO (V) ABOVE; [(VII) BEING THE EXPENDITURE ON DISTRIBUTION OF SA MPLES EITHER FREE OF COST OR AT CONCESSIONAL RATE; AND] (VIII) BEING THE EXPENDITURE BY WAY OF PAYMENT TO A NY PERSON OF REPUTE FOR PROMOTING THE SALE OF GOODS OR SERVICES OF THE BUSI NESS OF THE EMPLOYER,] SHALL NOT BE CONSIDERED AS EXPENDITURE ON SALES PRO MOTION INCLUDING PUBLICITY; (E) EMPLOYEES' WELFARE. [EXPLANATION.FOR THE PURPOSES OF THIS CLAUSE, ANY EXPENDITURE INCURRED OR PAYMENT MADE TO (I) FULFIL ANY STATUTORY OBLIGATION; OR (II) MITIGATE OCCUPATIONAL HAZARDS; OR ICICI PRUDENTIAL LIFE INSURANCE COMPANY LTD. 6 (III) PROVIDE FIRST AID FACILITIES IN THE HOSPITAL OR DISPENSARY RUN BY THE EMPLOYER; OR (IV) PROVIDE CRECHE FACILITY FOR THE CHILDREN OF TH E EMPLOYEE; OR (V) SPONSOR A SPORTSMAN, BEING AN EMPLOYEE; OR (VI) ORGANISE SPORTS EVENTS FOR EMPLOYEES, SHALL NOT BE CONSIDERED AS EXPENDITURE FOR EMPLOYEE S' WELFARE;] (F) CONVEYANCE (G) USE OF HOTEL, BOARDING AND LODGING FACILITIES; (H) REPAIR, RUNNING (INCLUDING FUEL), MAINTENANCE O F MOTOR CARS AND THE AMOUNT OF DEPRECIATION THEREON; (I) REPAIR, RUNNING (INCLUDING FUEL) AND MAINTENANC E OF AIRCRAFTS AND THE AMOUNT OF DEPRECIATION THEREON; (J) USE OF TELEPHONE (INCLUDING MOBILE PHONE) OTHER THAN EXPENDITURE ON LEASED TELEPHONE LINES; (K) [***] (L) FESTIVAL CELEBRATIONS; (M) USE OF HEALTH CLUB AND SIMILAR FACILITIES; (N) USE OF ANY OTHER CLUB FACILITIES; (O) GIFTS; AND (P) SCHOLARSHIPS; [(Q) TOUR AND TRAVEL (INCLUDING FOREIGN TRAVEL).] 8. SUB-SECTION (2) OF SECTION 115WB OF THE ACT ELU CIDATES THE FRINGEBENEFITS WHICH SHALL BE DEEMED TO HAVE BEEN PROVIDED BY THE EMPLOY ER TO HIS EMPLOYEES. IT IS PROVIDED THAT IF AN EMPLOYER IN THE COURSE OF HIS B USINESS ORPROFESSION INCURS ANY EXPENDITURE FOR THE PURPOSES SET OUT THEREIN, IT SH ALL BEDEEMED THAT FRINGE BENEFIT HAS BEEN PROVIDED BY THE EMPLOYER TO THEEMPLOYEES. WE MAY OBSERVE THAT U/S. 115WB(1)THE EXPENSES INCURRED BY THE EMPLOYER, IN C ONSIDERATION FOR EMPLOYMENT,FOR THE BENEFITS, SERVICES ETC. AS MENTIONED UNDER CLAU SE (A) TO (D) OF HIS EMPLOYEE ICICI PRUDENTIAL LIFE INSURANCE COMPANY LTD. 7 INCLUDING FORMER EMPLOYEE OR EMPLOYEES ARE LIABLE T O BE SUBJECTED TO FRINGE BENEFIT TAX. THE WORDS CONSIDERATION FOR EMPLOYMENT, EMPLOYER , EMPLOYEE, EMPLOYEES HAVE BEEN REPEATEDLY MENTIONED NOT ONLY IN MAIN SECTION BUT ALSO IN EVERY CLAUSE OF SECTION 115WB(1). SECTION 115WB(2) IS A DEEMING PROVISION. HERE THE W ORDS I.E. CONSIDERATION FOR EMPLOYMENT, EMPLOYEE, EMPLOYEES HAVE BEEN DELI BERATELY OMITTED BY THE FRAMERS OF THE STATUTE. 9. FOR PROPER INTERPRETATION OF THE SAID SECTION, W E NOW DISCUSS VARIOUS PROVISIONS/CLAUSES OF SUB-SECTION 115WB(2). A) UNDER CLAUSE (B) INSTEAD OF WORD EMPLOYEE AS H AS BEEN REPEATEDLY USED U/S. 115WB(1), THE WORD ANY PERSON HAS BEEN USED . B) UNDER CLAUSE (D) I.E. SALES PROMOTIONINCLUDING PUBLICITY THE HEAD ITSELF SUGGESTS THATTHESE TYPE OF EXPENSES HAVE NOTHING TO DO WITH EMPLOYEES-EMPLOYER RELATION OR ANY BENEFIT TO THE EMPLOYEES. C) FURTHER UNDER THE EXCLUSION CLAUSE OF CLAUSE (D) , WE MAY OBSERVE THAT AS MENTIONED UNDER SUB-CLAUSE (I), ANY EXPENDITURE INC URRED BY THE EMPLOYER ON ADVERTISEMENT IN ANY PRINT, ELECTRONIC MEDIA AND TR ANSPORT SYSTEM CANNOT BE SAID IN ANY MANNER RELATING TO CONSIDERATION FOR EMPLOYMENT . D) SIMILARLY, AS MENTIONED UNDER SUB-CLAUSE (III) A NY EXPENDITURE INCURRED ON SPONSORSHIP OF ANY SPORTS EVENT OR ANY OTHER EVE NT ORGANIZED BY ANY GOVERNMENT AGENCY OR TRADE ASSOCIATION OR BODY ARE ALSO EXEMPT . AGAIN SUCH TYPE OF EXPENDITURE HASNOTHING TO DO WITH EMPLOYEE-EMPLOYER RELATIONSHI P OR ANY BENEFIT TO THE EMPLOYEES. E) ANY EXPENSES INCURRED AS PER CLAUSE (IV) BEING P UBLICATION OF ANY NOTICE REQUIRED BY AN ORDER UNDER ANY LAW OR ANY COURT OR TRIBUNAL HAS NO CONNECTION WITH ANY EMPLOYEE-EMPLOYER RELATIONSHIP. F) ANY EXPENDITURE AS MENTIONED UNDER SUB-CLAUSES (V) AND CLAUSE (VI) I.E. EXPENSES RELATING TO ADVERTISING OR PAYMENT TO ANY ADVERTISING AGENCY AND FURTHER UNDER SUB CLAUSE (VIII) ANY EXPENDITURE BY WAY OF P AYMENT TO ANY PERSON OF REPUTE FOR PROMOTING THE SALE ETC. ALSO HAS NO CONNECTION WITH THE EMPLOYEE-EMPLOYER RELATIONSHIP OR ANY BENEFIT ELEMENT TO THE EMPLOYEE S. ICICI PRUDENTIAL LIFE INSURANCE COMPANY LTD. 8 THE PARLIAMENT IN ITS OWN WISDOM HAS NOT USED THE W ORD ANY EMPLOYEE OF REPUTE RATHER HAS USED PERSON OF REPUTE UNDER CL AUSE (VIII) OF CLAUSE (D) OF SUB- SECTION 115WB(2). G) UNDER CLAUSE (E) OF SUB-SECTION 115WB(2), THE EX PENSES AS MENTIONED THEREIN ARE RELATING TO THE WELFARE OF EMPLOYEES AN D AS SUCH WORDS EMPLOYEES WELFARE HAVE BEEN SPECIFICALLY MENTIONED AND ARE SUBJECTED TO FRINGE BENEFIT TAX EXCLUDING EXPENDITURE AS MENTIONED UNDER EXCLUSION CLAUSES (I ) TO (VI). SO A PERUSAL OF THE ENTIRE SECTION 115WB(2) REVEALS THAT WHEREVER THE PARLIAMENT HAS INTENTION TO INCLUDE THE EXPENDITURE FROM WHICH ANY BENEFIT IS DERIVED OUT TO THE EMPLOYEES, THE WORD EMPLOYEES HAS BEEN SPECIFICALLY USED. WHEREAS, THE EXPENDITURE AS MENTIONED UNDER OTHER HEADS, AS DISC USSED ABOVE, THE WORD EMPLOYEE HAS BEEN INTENTIONALLY OMITTED, RATHER T HE WORD ANY PERSON HAS BEEN USED. EVEN CERTAIN EXPENSES AS MENTIONED THEREIN WH ICH ARE GENERALLY INCURRED BY THE EMPLOYER IN THE ORDINARY COURSE OF BUSINESS AND CAN NOT BE IN ANY MANNER SAID TO BE INCURRED BY THE EMPLOYER FOR THE WELFARE OR BENEFIT OF THE EMPLOYEE,THE NATURE OF THOSE EXPENSES BEING SUCH, EVEN WITHOUT ANY REMOTE BENEFI T TO THE EMPLOYEES, HAVE BEEN SUBJECTED TO FRINGE BENEFIT TAX THROUGH EXPRESS PRO VISIONS OF THE STATUTE. THE LANGUAGE OF THE SECTION IS CLEAR UNAMBIGUOUS A ND STRAIGHT AND THERE IS NO PLACE FOR INSERTION OR SUBTRACTION OR SUBSTITUTION OF ANY WORD INTO IT. A CAREFUL READING OF THE ENTIRE SECTION REVEALS WITHOUT ANY DOUBT THAT SUB-S ECTION (2) IS AN INDEPENDENT SECTION AND IS NOT CONTROLLED BY SUB-SECTION (1) AN D BOTH SUB-SECTION (1) & SUB-SECTION (2) OPERATE IN A DIFFERENT FIELDS. ANY INFERENCE TH AT SUB-SECTION (2) IS CONTROLLED BY SUB- SECTION (1) AND ANY EXPENDITURE WHICH IS NOT A CONS IDERATION FOR EMPLOYMENT AS MENTIONED UNDER DIFFERENT HEADS OF SUB-SECTION (2) CANNOT BE CONSIDERED AS FRINGE BENEFIT, WILL LEAD MOST OF THE PROVISIONS OF SUB-SE CTION (2) AS REDUNDANT, OTIOSE OR MEANINGLESS. IT IS A SETTLED PRINCIPLE OF LAW THAT A STATUTE SHOULD ORDINARILY BE GIVEN PURPOSIVE CONSTRUCTION AND ANY INTERPRETATION CANNO T BE MADE WHICH WILL RESULT IN AN ANOMALY OR ABSURDITY. A SIMPLE AND PLAIN READING OF SECTION 115WB(2) REVEALS THAT IF THE EMPLOYER INCURS ANY OF THE EXPENDITURE AS MENT IONED UNDER CLAUSES (A) TO (Q), THOUGH MAY OR MAY NOT HAVE BEEN INCURRED BY THE EMP LOYER IN CONSIDERATION OF EMPLOYMENT OR FOR PROVIDING ANY BENEFIT OR INCENTIV E TO THE EMPLOYEES, BUT ALSO FOR BENEFIT TO ANY THIRD PERSON, BUT IN THE COURSE OF BUSINESS OR PROFESSION,IS DEEMED TO HAVE BEEN PROVIDED BY THE EMPLOYER TO THE EMPLOYEES . WITH THIS DEEMING PROVISION THE SCOPE OF THE FRINGE BENEFIT TAX HAS BEEN EXPENDED C OVERING THOSE EXPENSES, WHICH HAVE ICICI PRUDENTIAL LIFE INSURANCE COMPANY LTD. 9 BEEN MENTIONED UNDER THE SUB-SECTION (2), EVEN THOU GH THE EMPLOYEE-EMPLOYER RELATIONSHIP MAY OR MAY NOT BE PRESENT OR EVEN THOU GH ANY BENEFIT IS DERIVED OUT OR NOT TO THE EMPLOYEES. NOW COMING AGAIN TO THE WORDINGS OF SECTION 115WB(2 ), WE MAY OBSERVE THAT A CAREFUL READING OF CLAUSE (B) AS WELL AS CLAUSES (I ),(II)(IV)(V)(VI) & (VIII) OF SECTION 115WB(2)(D) REVEALS THAT THE LEGISLATURE HAS EXCLUD ED FROM THE PURVIEW OF FRINGE BENEFIT TAX CERTAIN SPECIFIC FORMS OF PAYMENTS TO T HIRD PARTIES AS DETAILED THEREIN. THE REASONABLE PRESUMPTION IS THAT THE SPECIFIC TYPE OF EXPENDITURE IN THE FORM OF PAYMENT TO THIRD PERSONS WHICH HAVE BEEN SPECIFICAL LY EXCLUDED UNDER THE STATUTE IS NOT LIABLE TO FRINGE BENEFIT TAX, BUT THE REMAINING AS MENTIONED UNDER DIFFERENT HEADS OF SUB-SECTION (2) RELATING TO PAYMENT TO THIRD PAR TIES IS SUBJECTED TO FRINGE BENEFIT TAX. IT IS FURTHER REVEALED THAT WHERE THE EXPENDITURE I N THE FORM OF PAYMENT TO THE EMPLOYEES HAS TO BE INCLUDED, THE WORD EMPLOYEE H AS BEEN SPECIFICALLY USEDE.G. CLAUSE (E) OF SECTION 115WB(2), BUT NOT OTHERWISE. 10. IN OUR VIEW THIS TRIBUNAL HAS NO JURISDICTION T O ADD OR SUBSTITUTE THE WORD EMPLOYEE IN THE PROVISIONS OF THE STATUTE WHEN TH E LEGISLATURE HAS INTENTIONALLY OMITTED THE SAME. NEITHER ANY PRESUMPTION NOR ANY I NFERENCE CAN BE DRAWN IN THAT RESPECT; RATHER LANGUAGE OF THE SECTION REVEALS THA T THE EXPENDITURE MENTIONED THERE IN IS RELATING TO PAYMENT TO THIRD PERSONS EXCEPT W HERE THE WORD EMPLOYEE HAS BEEN SPECIFICALLY USED. THE PRINCIPLES OF LEGAL INTERPRE TATION DO NOT ALLOW ANY DIFFERENT TYPE OF INTERPRETATION OF THIS PROVISION. THE STATUTE IS TO BE READ AS A WHOLE SO AS TO GIVE MEANING TO THE ENTIRE STATUTE INSTEAD OF MAKING A P ART OF IT REDUNDANT, OTIOSE OR MEANINGLESS HON'BLE SUPREME COURT IN SARASWATI SUGAR MILLS VS. HARYANA STATE BOARD 1992 AIR 224, HAS HELD THAT EVERY ACT OF THE PARLIAMENT MUST BE READ ACCORDING TO THE STRICT NATURAL CONSTRUCTION OF ITS WORDS. 11. IT MAY BE FURTHER OBSERVED THAT A CAREFUL READI NG OF SECTION 115 WB(1) REVEALS THAT THE WORDS ANY PRIVILEGE,SERVICE, FACILITYOR A MENITY, DIRECTLY OR INDIRECTLY ARE WIDE ENOUGH TO COVER THE EXPENDITURE INCURRED BY THE EMP LOYER FOR THE EMPLOYEES FOR ENTERTAINMENT, HOSPITALITYIN ANY MANNER WHETHER BY WAY OF FOOD OR BEVERAGES OR IN ANY OTHER MANNER WHATSOEVER, CONVEYANCE, USE OF HOT EL, BOARDING AND LODGING FACILITIES, REPAIR AND MAINTENANCE OF MOTOR CARS AN D AIR CRAFTS, TELEPHONE, FESTIVAL CELEBRATIONS, USE OF HEALTH CLUB AND SIMILAR FACILI TIES, USE OF ANY OTHER CLUB FACILITIES, ICICI PRUDENTIAL LIFE INSURANCE COMPANY LTD. 10 GIFTS, SCHOLARSHIPS, TOUR AND TRAVEL INCLUDING FORE IGN TRAVEL OF THE EMPLOYEES. THERE WAS NO NEED FOR THE PARLIAMENT TO ENACT AND MENTION ABOVE NOTED EXPENSES SEPARATELY UNDER CLAUSES (A), (B), (F), (G), (H),(I), (J), (L) , (M), (N), (O), (P) &(Q) OF SECTION 115WB(2). THE REASONABLE INFERENCE THAT CAN BE DRAW N IS THAT THIS TYPE OF EXPENDITURE THOUGH DOES NOT RELATES TO EMPLOYEE- EMPLOYER RELAT IONSHIP YET, IS DEEMED TO BE INCURRED BY THE EMPLOYER ON THE EMPLOYEE SO AS TO E XPAND AND COVER THE ABOVE MENTIONED TYPE OF EXPENDITURE UNDER FBT. 12. AS PER THE SETTLED LAW, THE WORDS CANNOT BE ADD ED OR SUBSTITUTED IN A STATUTE TO GIVE IT A DIFFERENT MEANING WHEN THE WORDS OR LANGU AGE OF THE STATUTE IS CLEAR AND UNAMBIGUOUS. THE QUESTION OF INTERPRETATION OF STAT UTE ARISES ONLY WHEN THERE IS ANY DOUBT, AMBIGUITY, INCONSISTENCY, INCOMPLETENESS OR LACUNA IN THE LANGUAGE OR CONSTRUCTION OF THE STATUTE. HON'BLE SUPREME COURT IN THE CASE OF CALCUTTA JUTE MANUFACTURING CO. VS. COMMERCIAL TAX OFFICER, 1997 AIR 2920 , HAS HELD THAT IN CASE OF INTERPRETING A TAXING STATUTE, ONE HAS TO L OOK INTO WHAT IS CLEARLY STATED. THERE IS NO ROOM FOR SEARCHING THE INTENTIONS, PRESUMPTIO NS OR EQUITY. GIVING WORDS THEIR ORDINARY AND NATURAL MEANING IS KNOWN AS LITERAL INTERPRETATION OR LITERA LEGIS. IT IS THE DUTY OF THE COURT NOT TO MO DIFY THE LANGUAGE OF THE ACT AND IF SUCH MEANING IS CLEAR AND UNAMBIGUOUS, EFFECT SHOULD BE TO THE PROVISIONS OF A STATUTE WHATEVER MAY BE THE CONSEQUENCE. THE IDEA BEHIND SU CH A PRINCIPLE IS THAT THE LEGISLATURE, BEING THE SUPREME LAW MAKING BODY MUST KNOW WHAT IT INTENDS IN THE WORDS OF THE STATUE. LITERAL INTERPRETATION HAS BEE N CALLED THE SAFEST RULE BECAUSE THE LEGISLATURES INTENTION CAN BE DEDUCED ONLY FROM TH E LANGUAGE THROUGH WHICH IT HAS EXPRESSED ITSELF. THE BARE WORDS OF THE ACT MUST BE CONSTRUED TO GET THE MEANING OF THE STATUTE AND ONE NEED NOT PROBE INTO THE INTENTI ON OF THE LEGISLATURE. THE WORDS OF A STATUE MUST PRIMA FACIE BE GIVEN THEIR ORDINARY MEA NING, THIS INTERPRETATION IS CALLED THE GOLDEN RULE OF INTERPRETATION. HON'BLE SUPREME COURT IN THE CASE OF SOUTHERN PETROCHEMICAL INDUSTRIES CO. LTD. VS. ELECTRICITY INSPECTOR AND E.T.I.O & ORS., TPL(LE) 38534 SC, HAS HELD THAT A TAXING STATUTE, AS IS WELL KNOWN, MUST RECEIVE ST RICT INTERPRETATION ( MANISH MAHESHWARI VS. ASSISTANT COMMISSIONER OF INCOME TAX AND ANOTHER 2007 (3) SCLAE 627). ICICI PRUDENTIAL LIFE INSURANCE COMPANY LTD. 11 HON'BLE SUPREME COURT IN STATE OF M.P. VS. RAKESH KOHLI & ANR., CIVIL APPEAL NO. 684 OF 2004 DECIDED IN 11.5.2012, WHILE SUMMING UP THE LAW RELATED TO THE INTERPRETATION AND VALIDITY OF TAXING STATUTE H AS OBSERVED AS UNDER :- IN COMMISSIONER OF INCOME TAX, MADRAS VS. RSV SR. ARUNACHALAM CHETTIAR (12), A THREE JUDGE BENCH OF THIS COURT, INTER ALIA OBSER VED IN PARAGRAPH 13 (AT PAGE 1220-21) OF THE REPORT, EQUITY IS OUT OF PLACE IN TAX LAW; A PARTICULAR INCOME IS EITHER EXIGIBLE TO TAX UNDER THE TAXING STATUTE OR IT IS NOT. THE COURT HIGHLIGHTED THAT THE COURT COULD NOT CON CERN ITSELF WITH THE INTENTION OF THE LEGISLATURE WHEN THE LANGUAGE EXPRESSING SUCH I NTENTION WAS PLAIN AND UNAMBIGUOUS. 20 . IN P. LAXMI DEVI (SMT.)7, A TWO-JUDGE BENCH OF THIS COURT WAS CONCERNED WITH A JUDGMENT OF THE ANDHRA PRADESH HIGH COURT. T HE HIGH COURT HAD DECLARED SECTION 47-A OF THE 1899 ACT AS AMENDED BY A.P. ACT 8 OF 1998 THAT REQUIRED A PARTY TO DEPOSIT 50% DEFICIT STAMP DUTY AS A CONDIT ION PRECEDENT FOR A REFERENCE TO A COLLECTOR UNDER SECTION 47-A UNCONSTITUTIONAL. THE COURT SAID IN P. LAXMI DEVI (SMT.)7 AS FOLLOWS : 19. IT IS WELL SETTLED T HAT STAMP DUTY IS A TAX, AND HARDSHIP IS NOT RELEVANT IN CONSTRUING TAXING STATU TES WHICH ARE TO BE CONSTRUED STRICTLY. AS OFTEN SAID, THERE IS NO EQUITY IN A TA X VIDE CIT V. V.MR.P. FIRM MUAR. IF THE WORDS USED IN A TAXING STATUTE ARE CLEAR, ONE CANN OT TRY TO FIND OUT THE INTENTION AND THE OBJECT OF THE STATUTE. HENCE THE HIGH COURT FELL IN ERROR IN TRYING TO GO BY THE SUPPOSED OBJECT AND INTENDMENT OF THE STAMP ACT, AND BY SEEKING TO FIND OUT THE HARDSHIP WHICH WILL BE CAUSED TO A PAR TY BY THE IMPUGNED AMENDMENT OF 1998. 21. IT HAS BEEN HELD BY A CONSTITUTION BENCH OF THI S COURT IN ITO V. T.S. DEVINATHA NADAR (VIDE AIR PARAS 23 TO 28) THAT WHER E THE LANGUAGE OF A TAXING PROVISION IS PLAIN, THE COURT CANNOT CONCERN ITSELF WITH THE INTENTION OF THE LEGISLATURE. HENCE, IN OUR OPINION THE HIGH COURT E RRED IN ITS APPROACH OF TRYING TO FIND OUT THE INTENTION OF THE LEGISLATURE IN ENACTI NG THE IMPUGNED AMENDMENT TO THE STAMP ACT. 13. HON'BLE SUPREME COURT IN THE ABOVE SAID AUTHORI TY HAS FURTHER HELD THAT THE COURT MUST MAKE EVERY EFFORT TO UPHOLD THE CONSTITU TIONAL VALIDITY OF A STATUTE, EVEN IF THAT REQUIRES GIVING A STRAINED CONSTRUCTION OR NAR ROWING DOWN ITS SCOPE. IT IS NONE OF THE CONCERN OF THE COURT WHETHER THE LEGISLATION IN ITS OPINION IS WISE OR UNWISE. COURT MUST NOT INVALIDATE A STATUTE LIGHTLY FOR AS OBSERV ED ABOVE INVALIDATION OF A STATUTE MADE BY THE LEGISLATURE ELECTED BY THE PEOPLE IS A GRAVE STEP. HON'BLE SUPREME COURT, WHILE RELYING UPON VARIOUS EARLIER JUDGEMENTS OF HO N'BLE SUPREME COURT ITSELF, FURTHER OBSERVED THAT THE LEGISLATURE IS THE BEST JUDGE OF WHAT IS GOOD FOR THE COMMUNITY, BY WHOSE SUFFRAGE, IT COMES INTO EXISTENCE. HON'BLE SU PREME COURT REFERRING TO R.K. GARGS CASE OBSERVED THAT THE CONSTITUTIONAL BENCH OF THE SUPREME COURT STATED THAT ICICI PRUDENTIAL LIFE INSURANCE COMPANY LTD. 12 LOSS RELATING TO ECONOMIC ACTIVITIES SHOULD BE VIEW ED WITH GREATER LATITUDE THAN LAWS TOUCHING CIVIL RIGHTS SUCH AS FREEDOM OF SPEECH, RE LIGION ETC. HON'BLE SUPREME COURT AFTER MAKING DISCUSSION UPON THE LAW LAID DOWN BY H ON'BLE SUPREME COURT IN VARIOUS CASES HAS SUMMED UP THE FOLLOWING PRINCIPLES :- (I) THERE IS ALWAYS PRESUMPTION IN FAVOUR OF CONSTITUTI ONALITY OF A LAW MADE BY PARLIAMENT OR A STATE LEGISLATURE (II) NO ENACTMENT CAN BE STRUCK DOWN BY JUST SAYING THAT IT IS ARBITRARY OR UNREASONABLE OR IRRATIONAL BUT SOME CO NSTITUTIONAL INFIRMITY HAS TO BE FOUND. (III) THE COURT IS NOT CONCERNED WITH THE WISDOM OR UNWIS DOM, THE JUSTICE OR INJUSTICE OF THE LAW AS THE PARLIAMENT A ND STATE LEGISLATURES ARE SUPPOSED TO BE ALIVE TO THE NEEDS OF THE PEOPLE WHOM THEY REPRESENT AND THEY ARE THE BEST JUDGE OF THE COMMUNITY BY WHOSE SUFFRAGE THEY COME INTO EXISTENC E. (IV) HARDSHIP IS NOT RELEVANT IN PRONOUNCING ON THE CON STITUTIONAL VALIDITY OF A FISCAL STATUTE OR ECONOMIC LAW. (V) IN THE FIELD OF TAXATION, THE LEGISLATURE ENJOYS GR EATER LATITUDE FOR CLASSIFICATION. 14. THE MATTER RELATING TO FRINGE BENEFIT TAX CAME INTO CONSIDERATION AND DISCUSSION BEFORE HON'BLE SUPREME COURT IN R& B FALCON (A) PTY LTD. VS. CIT, CIVIL APPEAL NO. 3326 OF 2008. SINCE THE POINT IN DISPUTE BEFORE US WAS NOT UNDER CONSIDERATION BEFORE SUPREME COURT HENCE, HON'BLE SUPREME COURT DID NOT MAKE ANY SPECIFIC OBSERVATION REGARDING POINT IN DISPUTE WE ARE DEALING WITH. HOW EVER, THE LAW LAID DOWN IN THE ABOVE AUTHORITY BY THE HONBLE SUPREME COURT RELATI NG TO THE OPERATION OF SECTION 115WB(1), SECTION 115WB(2) VIS--VIS SECTION 115WB( 3) IS VERY RELEVANT AND CAN BE SQUARELY APPLIED IN THE CASE IN HAND. HON'BLE SUPRE ME COURT IN PARAGRAPH 14 OF THE JUDGEMENT HAS OBSERVED AS UNDER :- 14. CBDT CATEGORICALLY STATES IN ANSWER TO QUESTIO N NUMBER 7 THAT SUB- SECTION (2) PROVIDES FOR AN EXPANSIVE DEFINITION. DOES IT M EAN THAT SUB-SECTION (2) IS MERELY AN EXTENSION OF SUB- SECTION (1) OR IT IS AN INDEPENDENT PROVISION? IF SUB- SECTION (2) IS MERELY AN EXTENSION OF SUB-SECTION ( 1), MR. GANESH MAY BE RIGHT BUT WE MUST NOTICE THAT SECTION 115WA PROVIDES FOR IMPO SITION OF TAX ON EXPENDITURE INCURRED BY THE EMPLOYER OR PROVIDING ITS EMPLOYEES CERTAIN BENEFITS. THOSE BENEFITS WHICH ARE DIRECTLY PROVIDED ARE CONTAINED IN SUB-SECTION (1). SOME OTHER ICICI PRUDENTIAL LIFE INSURANCE COMPANY LTD. 13 BENEFITS, HOWEVER, WHICH THE EMPLOYER PROVIDES TO T HE EMPLOYEES BY INCURRING ANY EXPENDITURE OR MAKING ANY PAYMENT FOR THE PURPO SE ENUMERATED THEREIN IN THE COURSE OF HIS BUSINESS OR PROFESSION, IRRESPECT IVE OF THE FACT AS TO WHETHER ANY SUCH ACTIVITY WOULD BE CARRIED ON A REGULAR BASIS O R NOT, E.G., ENTERTAINMENT WOULD, BY REASON OF THE LEGAL FICTION CREATED, ALSO BE DEEMED TO HAVE BEEN PROVIDED BY THE EMPLOYER FOR THE PURPOSE OF SUB-SEC TION (2). WHEREAS SUB-SECTION (1) ENVISAGES ANY AMOUNT PAID TO THE EMPLOYEE BY WA Y OF CONSIDERATION FOR EMPLOYMENT, WHAT WOULD BE THE LIMITS THEREOF ARE ON LY ENUMERATED IN SUB- SECTION (2). WE, THEREFORE, ARE OF THE OPINION THAT SUB-SECTIONS (1) AND (2), HAVING REGARD TO THE PROVISIONS OF SECTION 115WA AS ALSO S UB-SECTION (3) OF SECTION 115WB, MUST BE HELD TO BE OPERATING IN DIFFERENT FI ELDS. HON'BLE SUPREME COURT FURTHER IN PARAGRAPHS 17 TO 19 HAS OBSERVED AS UNDER :- 17. IT IS NOW A WELL SETTLED PRINCIPLE OF LAW THAT A STATUTE SHOULD ORDINARILY BE GIVEN A PURPOSIVE CONSTRUCTION. { SEE NEW INDIA ASSURANCE COMPANY LTD. V. NUSLI NEVILLE WADIA AND ANR. [2007 (14) SCALE 556]; TANNA AND MODI V. C.I.T., MUMBAI XXV AND ORS. [2007 (8) SCALE 511] AND UDAI SINGH DAGAR AND ORS. V. UNION OF INDIA (UOI) AND ORS. [2007 (7) SCALE 278]} . 18. THE PARLIAMENT, IN INTRODUCING THE CONCEPT OF F RINGE BENEFITS, WAS CLEAR IN ITS MIND IN SO FOR AS ON THE ONE HAND IT AVOIDED IMPOSI TION OF DOUBLE TAXATION, I.E., TAX BOTH ON THE HANDS OF THE EMPLOYEES AND EMPLOYER S; ON THE OTHER, IT INTENDED TO BRING SUCCOUR TO THE EMPLOYERS OFFERING SOME PRI VILEGE, SERVICE, FACILITY OR AMENITY WHICH WAS OTHERWISE THOUGHT TO BE NECESSARY OR EXPEDIENT. IF ANY OTHER CONSTRUCTION IS PUT TO SUB-SECTIONS (1) AND (3), TH E PURPOSE OF GRANT OF EXEMPTION SHALL BE DEFEATED. IF THE LATTER PART OF SUB- SECTI ON (3) CANNOT BE GIVEN ANY MEANING, IT WILL RESULT IN AN ANOMALY OR ABSURDITY. IT IS ALSO NOW A WELL SETTLED PRINCIPLE OF LAW THAT THE COURT SHALL AVOID SUCH CO NSTRUCTIONS WHICH WOULD RENDER A PART OF THE STATUTORY PROVISION OTIOSE OR MEANING LESS. [ SEE VISITOR AND ORS. V. K.S. MISRA [(2007) 8 SCC 593]; COMMISSIONER OF SALES TAX, DELHI AND ORS. V. SHRI KRISHNA ENGG. COMPANY AND ORS. [(2005) 2 SCC 692]. 19. WE, THEREFORE, ARE OF THE OPINION THAT AAR WAS RIGHT IN ITS OPINION THAT THE MATTERS ENUMERATED IN SUB-SECTION (2) OF SECTION 11 5WB ARE NOT COVERED BY SUB- SECTION (3) THEREOF, AND THE AMENITY IN THE NATURE OF FREE OR SUBSIDIZED TRANSPORT IS COVERED BY SUB-SECTION (1). 15. THE HON'BLE SUPREME COURT IS CLEAR IN TERMS WH ILE HOLDING THAT SECTION 115 WB(1)AND 115WB(2) OPERATE IN DIFFERENT FILEDS. HON' BLE SUPREME COURT HAS ALSO HELD THAT THE COURTS SHOULD AVOID SUCH CONSTRUCTIONS WHI CH WOULD RENDER A PART OF STATUTORY PROVISIONS OTIOSE OR MEANINGLESS. THOUGH, THE HON'BLE SUPREME COURT WAS CONCERNED WITH THE POINT THAT WHETHER MATTER ENUMER ATED IN SUB-SECTION (3) OF SECTION 115WB ARE COVERED WITH SUB-SECTION 115WB(2) OR 115W B(1) YET, THE HON'BLE SUPREME ICICI PRUDENTIAL LIFE INSURANCE COMPANY LTD. 14 COURTHAS IN CLEAR TERMS HELD THAT SECTION 115WB(1) AND 115WB(3) ARE INTERCONNECTED WHEREAS SECTION 115WB(2) IS AN INDEPENDENT SECTION AND THE MATTERS ENUMERATED IN SUB-SECTION 115WB(2) OPERATE IN A DIFFERENT FIELD. 16. IN THE PRESENT CASE, BOTH THE PARTIES HAVE RELI ED UPON A CIRCULAR BY CBDT BEARING NO. 8/2005. THE CIRCULAR PROVIDES FOR EXPLA NATORY NOTES ONTHE PROVISIONS RELATING TO FRINGE BENEFIT TAX. UNDER THE HEADING FREQUENTLY ASKED QUESTIONS, THE QUESTION NO. 14 AND ITS ANSWER BY THE SAID CIRCULAR IS RELEVANT, WHICH PART OF THE CIRCULAR FOR THE SAKE OF CONVENIENCE IS REPRODUCED AS UNDER :- DO THE WORDS ANY EXPENSE IN SUB-SECTION (2) OF S ECTION 115WB REFER TO ALL EXPENSES OR RESTRICTED TO THOSE INCURRED ON THE EMP LOYEES AND THEIR FAMILIES? 14.UNDER SUB-SECTION (2) OF SECTION 115WB, FRINGE B ENEFITS SHALL BE DEEMED TO HAVE BEEN PROVIDED BY THE EMPLOYER TO HIS EMPLOYEES , IF THE CONDITIONS SPECIFIED THEREIN ARE SATISFIED. HENCE, IF THE EMPLOYER HAS I NCURRED ANY EXPENSE FOR ANY ONE OF THE PURPOSES ENUMERATED IN CLAUSES (A) TO (P ) OF SUB-SECTION (2) OF SECTION 115WB, THE WHOLE OF THAT EXPENSE FALLING UNDER THE RELEVANT HEAD SHALL BE DEEMED TO HAVE BEEN PROVIDED. NO SEGREGATION AS EX PENSES INCURRED ON EMPLOYEES OR EXPENSES INCURRED ON OTHERS IS PERM ISSIBLE. 17. FURTHER QUESTION NO. 56 IS ALSO RELEVANT, WHICH IS REPRODUCED AS UNDER :- WHETHER FBT WILL APPLY TO THE EXPENDITURE INCURRED FOR THE PURPOSES OF CONFERENCES OF THE AGENTS OR DEALERS OR DEVELOPMENT ADVISORS? 56.IN TERMS OF THE PROVISIONS OF CLAUSE (C) OF SUB- SECTION (2) OF SECTION 115WB, ANY EXPENDITURE INCURRED FOR THE PURPOSES OF CONFER ENCE IS LIABLE TO FBT IRRESPECTIVE OF WHETHER THE CONFERENCE IS OF AGENTS OR DEALERS OR DEVELOPMENT ADVISORS OR ANY OTHER PERSONS. THEREFORE, THE EXPEN DITURE INCURRED FOR THE PURPOSES OF AGENTS OR DEALERS OR DEVELOPMENT ADVISO RS IS LIABLE TO FBT. 18. THE VALIDITY OF THE SAID CIRCULAR ALSO CAME IN QUESTION BEFORE HON'BLE SUPREME COURT IN R& B FALCON (A) PTY LTD. VS. CIT (SUPRA ) CASE. HON'BLE SUPREME COURT IN PARAGRAPH 22 HAS OBSERVED AS UNDER :- CBDT HAS THE REQUISITE JURISDICTION TO INTERPRET T HE PROVISIONS OF INCOME-TAX ACT. THE INTERPRETATION OF CBDT BEING IN THE REALM OF EX ECUTIVE CONSTRUCTION, SHOULD ORDINARILY BE HELD TO BE BINDING, SAVE AND EXCEPT W HERE IT VIOLATES ANY PROVISIONS OF LAW OR IS CONTRARY TO ANY JUDGMENT RENDERED BY T HE COURTS. THE REASON FOR GIVING EFFECT TO SUCH EXECUTIVE CONSTRUCTION IS NOT ONLY SAME AS CONTEMPORANEOUS WHICH WOULD COME WITHIN THE PURVIEW OF THE MAXIM TE MPORANIA CASTE PESTO, EVEN IN CERTAIN SITUATION A REPRESENTATION MADE BY AN AU THORITY LIKE MINISTER PRESENTING THE BILL BEFORE THE PARLIAMENT MAY ALSO BE FOUND BOUND THEREBY. ICICI PRUDENTIAL LIFE INSURANCE COMPANY LTD. 15 19. HON'BLE SUPREME COURT RELYING UPON VARIOUS CASE LAWS AS DISCUSSED IN PARAGRAPH 22 TO 27OF THE SAID JUDGEMENT HAS UPHELD THE VALIDITY AND APPLICABILITY OF THE CIRCULAR NO. 8/2005 (I.E. CIRCULAR IN QUESTION) . THOUGH THE MATTER IN QUESTION BEFORE HON'BLE SUPREME COURT WAS RELATING TO SOME O THER PROVISIONS OF THE CIRCULAR, BUT HON'BLE SUPREME COURT IN THE LAST PARAGRAPH OF THE JUDGEMENT HAS UPHELD NOT ONLY THE VALIDITY OF THE SAID CIRCULAR BUT ALSO HEL D THAT THE INTERPRETATION OF THE CBDT OF THE PROVISIONS OF THE INCOME TAX ACT SHOULD ORDI NARILY BE HELD TO BE BINDING, SAVE AND EXCEPT WHERE IT VIOLATES PROVISIONS OF LAW OR I S CONTRARY TO ANY JUDGEMENT RENDERED BY THE COURTS. INCIDENTALLY CBDT CIRCULAR NO. 8/2005 IS NEITHER VIOLATIVE OF THE PROVISIONS OF LAW NOR ANY COURT OF LAW HAS SET ASIDE THE CIRCULAR IN QUESTION. 20. IT MAY BE FURTHER OBSERVED THAT THAT IT IS NOT WITHIN THE JURISDICTION OF THIS TRIBUNAL TO QUASH OR STRIKE DOWN ANY PROVISION OF T HE ACT, HOWEVER, HARSH OR UNREASONABLE IT MAY BE. THISJURISDICTION VESTS WITH THE HIGH COURTS OR SUPREME COURT. IF HON'BLE SUPREME COURT OR HIGH COURT THINKS THAT THE STATUTE IS ARBITRARY OR UNREASONABLE OR UNCONSTITUTIONAL, IT MAY QUASH OR S TRIKE DOWN THE STATUTE OR SOME SPECIFIC PROVISIONS OF THE STATUTE. HOWEVER THIS JU RISDICTION DOES NOT VEST WITH THIS TRIBUNAL. THE PROVISIONS OF THE STATUTE CANNOT BE Q UASHED OR STRUCK DOWN BY JUDICIAL INTERPRETATION BY THE ITAT SO AS TO RENDER THE SAME OTIOSE OR MEANINGLESS. THE PRINCIPLE OF JUDICIAL INTERPRETATION HAS THE LIMITE D SCOPE, WHEREAS IF THE PROVISIONS OF THE STATUTE ARE ARBITRARY OR UNCONSTITUTIONAL, THE SAME CAN ONLY BE STRUCK DOWN BY THE COURT OF COMPETENT JURISDICTION BUT CANNOT BE N ULLIFIED BY WAY OF JUDICIAL INTERPRETATION. 21. OUR ATTENTION HAS BEEN DRAWN TO CERTAIN PASSING REFERANCES MADE BY THE HONBLE HIGH COURT OF DELHI IN T&T MOTORS LTD. VS. ACIT, INCOME TAX APPEAL NO. 899 OF 2010 DECIDED ON 24.1.2012 AND THE HONBLE SUPREM E COURT IN R& B FALCON (A) PTY LTD. VS. CIT (SUPRA). THE HONBLE DELHI HIGH COURT WHILE DEALING WITH THE CONTENTION TO THE EFFECT THAT THE CUSTOMERS OF A COMPANY ARE NEITHER THE EMP LOYEES NOR ARE DEEMED TO BE EMPLOYEES, HENCE THE EMPLOYER CANNOT BE SUBJECTED T O FRINGE BENEFIT TAX, HAS OBSERVED IN PARA 8 OF THE JUDGEMENT AS FOLLOWS :- ONE OF TH E CONTENTIONS RAISED BY THE APPELLANT IS THAT CUSTOMERS ARE NOT EMPLOYEES AND A RE NOT DEEMED TO BE EMPLOYEES UNDER ANY OF THE PROVISIONS OF CHAPTER XIIH. THE SA ID CONTENTION MAY OR MAY NOT HAVE ICICI PRUDENTIAL LIFE INSURANCE COMPANY LTD. 16 MERIT BUT FOR THE PURPOSE OF PRESENT CASE, WE DO NO T THINK WE ARE REQUIRED TO GO INTO THIS LARGER QUESTION. SO THE HON'BLE HIGH COURT DID NOT DEEM IT FIT TO DE CIDE THIS QUESTION OF LAW FOR THE PURPOSE OF DECIDING THE LIS BEFORE IT. SO, UNDE R SUCH CIRCUMSTANCES ANY OBSERVATION MADE BY THE HON'BLE HIGH COURT WHILE DE CIDING THE SAID CASE HAS NO EFFECT SO AS TO POINT IN DISPUTE BEFORE US IS CONCERNED. IT MAY BE FURTHER OBSERVED THAT MERE DIRECTION OF THE SUPREME COURT WITHOUT LAYING DOWN ANY PRINCIPLE OF LAW IS NOT PRECEDENT. HON'BLE SUPREME COURT INSTATE OF U.P. VERSUS JEET S. BISHT 2007(6) SCC 586 IN PARA NO.66 AND 67 OF THE JUDGMENT HAS OBSERVED A S UNDER : - 66. IT IS WELL SETTLED THAT A MERE DIRECTION OF TH E SUPREME COURT WITHOUT LAYING DOWN ANY PRINCIPLE OF LAW IS NOT A PRECEDENT . IT IS ONLY WHERE THE SUPREME COURT LAYS DOWN A PRINCIPLE OF LAW THAT IT WILL AMOUNT TO A PRECEDENT. 67. IN MUNICIPAL COMMITTEE, AMRITSAR VS. HAZARA SI NGH, AIR 1975 SC 1087, THE SUPREME COURT OBSERVED THAT ONLY A STATEM ENT OF LAW IN A DECISION IS BINDING. IN STATE OF PUNJABVS. BALDEV S INGH,1999 (6) SCC 172, THIS COURT OBSERVED THAT EVERYTHING IN A DECISION I S NOT A PRECEDENT. IN DELHI ADMINISTRATION VS. MANOHARLAL,AIR 2002 SC 308 8, THE SUPREME COURT OBSERVED THAT A MERE DIRECTION WITHOUT LAYING DOWN ANY PRINCIPLE OF LAW IS NOT A PRECEDENT. IN DIVISIONAL CONTROLLER, K SRTC VS. MAHADEVA SHETTY, 2003 (7) SCC 197, THIS COURT OBSERVED AS FO LLOWS: .. THE DECISION ORDINARILY IS A DECISION ON THE C ASE BEFORE THE COURT, WHILE THE PRINCIPLE UNDERLYING THE DECISION WOULD BE BINDING AS A PRECEDENT IN A CASE WHICH COMES UP FOR DECISIO N SUBSEQUENTLY. THE SCOPE AND AUTHORITY OF A PRECEDENT SHOULD NEVER BE EXPANDED UNNECESSARILY BEYOND THE NEEDS OF A GIVEN SITUATION . THE ONLY THING BINDING AS AN AUTHORITY UPON A SUBSEQUENT JUDGE IS THE PRINCIPLE, UPON WHICH THE CASE WAS DECIDED... 22. SO ANY STRAY OBSERVATION OR PASSING REFERENCE W ITHOUT LAYING DOWN ANY PRINCIPLE OF LAW BY HIGHER COURTS CANNOT BE HELD TO BE A BINDING PRECEDENT. WHEREAS OBSERVATIONS MADE BY THE HON'BLE SUPREME COURT AFTE R DISCUSSION OF RELEVANT SECTIONS AND THUS LAYING DOWN THE PRINCIPLE OF LAW RELATING TO THE SCOPE OF OPERATION OF SECTION 115WB(1) & 115WB(2) CAN BE SAID TO HOLD A BINDING P RECEDENT. THE DECISION OF THE HONBLE APEX COURT OF THE COUNTRY PERHAPS WAS NOT B ROUGHT INTO THE NOTICE OF THE LD. CO-ORDINATE BENCHES OF THE TRIBUNAL AT THE TIME OF ADJUDICATION IN CASESM/S. TOYOTA KIRLOSKAR MOTOR PVT. LTD. VS. ADDL. CIT, LTU BANGAL ORE(SUPRA) & INTERVALVE (INDIA) LTD. VS. ADD. CIT (SUPRA). WITH DUE RESPECT, IN OUR VIEW , THE LAW LAID DOWN BY THE LD. ICICI PRUDENTIAL LIFE INSURANCE COMPANY LTD. 17 COORDINATE BENCHES OF THE TRIBUNAL DOES NOT HOLD A BINDING PRECEDENT IN VIEW OF THE FINDINGS OF THE APEX COURT IN F & B FALCON(A) PTY LTD.(SUPRA), WHICH WE ARE BOUND TO FOLLOW AND THUS WE DO ACCORDINGLY. 23. NOW COMING TO THE NEXT POINT, ADMITTEDLY THE AS SESSEE IS A LIFE INSURANCE COMPANY, LIFE INSURANCE AGENTS ARE APPOINTED UNDER THE STATUTE AND THEY ARE GIVEN LICENSES BY THE GOVERNMENT TO ACT AS SUCH. THEY ARE GIVEN EXTENSIVE TRAINING BY THE INSURANCE COMPANIES. THE SUCCESS OF THE BUSINESS OF THE INSURANCE COMPANY DEPENDS UPON THE SERVICES AND CONTINUATION IN SERVICE OF TH E AGENTS. THE SERVICES ARE RENDERED BY THE AGENTS PERSONALLY AS NO ONE CAN ACT ON THEIR BEHALF AND THEYCANNOT DELEGATE FURTHER THEIR AUTHORITY TO ANY OTHER PERSON. THEY P ERFORM WORK FOR SIGNIFICANT PERIOD AND AT REGULAR INTERVAL THEY ARE PROVIDED TRAINING AND RETRAINING.MORE OFTEN AFTER ACHIEVING A PARTICULAR TARGET OR CONTINUATION AS AN AGENT FOR A SPECIFIC PERIOD THEY ARE ALSO ABSORBED AS REGULAR EMPLOYEES AS FILED OFFICER S OR DEVELOPMENT OFFICERS IN THE SAME INSURANCE COMPANY WITHWHICH THEY WORK. THE AGE NTS ARE PROVIDED NOT ONLY THE TRAINING BUT ALSO SELLING MATERIAL, BROCHURE ETC. B Y THE EMPLOYER COMPANY. AN AGENT LIKE AN EMPLOYEES, DO NOT HAVE ANY RISK OF LOSS IN CASE OF THE LOSS TO OR FAILURE OF THE COMPANY AS EXCEPT THE ONLY RISK OF LOSS EMPLOYMEN T AS COMPARED TO THE INDEPENDENT CONTRACTORS. NO INVESTMENT OF THE AGENT IS INVOLVED IN RENDERING HIS SERVICES TO THE INSURANCE COMPANY. THE COMPANY PROV IDES NOT ONLY THE WORK ACHIEVING BASED COMMISSION BUT THE EMPLOYER COMPANY ALSO GIVES LOT OF BENEFITS IN THE SHAPE OF AMENITIES, PERQUISITES AND SERVICES TO ITS AGENTS. APART FROM THAT, THE TRAINING, CONFERENCE COMPONENTS, TRAVEL EXPENSES AN D CERTAIN HOSPITALITY EXPENSES ARE ALSO BORNE BY THE COMPANY FOR THE AGENTS. NO DOUBT AS OBSERVED IN COMMON LAW, THE AGENTS ARE NOT THE EMPLOYEES OF THE COMPANY BUT IT CAN BE SAFELY SAID THAT THEY HAVE THE COLOUR OF THE EMPLOYEES. STATUS OF THE AGENTS I S SOMEWHERE IN BETWEEN THE STATUS OF EMPLOYEES AND THIRD PERSON. IF THE AGENTS CANNOT BE SAID TO BE EMPLOYEES OF THE COMPANY, AT THE SAME TIME THEY CANNOT BE SAID TO BE THE THIRD PARTIES. THE INDIRECT INCENTIVES, BENEFITS AND PERQUISITES WHICH ARE COLL ECTIVELY ENJOYED BY THE AGENTS PROVIDED BY THE EMPLOYER COMPANY ARE NEITHER TAXED INDIVIDUALLY AT THE HANDS OF THE AGENTS NOR AT THE HANDS OF THE EMPLOYER COMPANY. TO BRING INTO THE PURVIEW AND SUBJECT THESE TYPE OF EXPENDITURE INCURRED BY THE E MPLOYER COMPANY ON CERTAIN PERSONS LIKE AGENTS, PROVISIONS OF SECTION 115WB(2) HAVE BEEN ENACTED. IN THE CASE IN HAND ALSO, MOST OF THE EXPENSES HAVE BEEN INCURRED BY THE ASSESSEE ON CONFERENCE, ICICI PRUDENTIAL LIFE INSURANCE COMPANY LTD. 18 PERQUISITE AND TRAINING OF THE AGENTS, THESE CANNOT BE SAID TO BE ORDINARY BUSINESS EXPENSES RATHER THESE TYPE OF EXPENSES ARE SQUARELY COVERED WITHIN THE PROVISIONS OF SECTION 115WB(2) OF THE INCOME TAX ACT. THE PARLIAM ENT IN ITS OWN WISDOM HAS ENACTED THE DEEMING PROVISIONS OF SECTION 115WB(2) TO COVER THE EXPENDITURE ON PERSONS HAVING THE COLOUR OF EMPLOYEES BUT DUE TO S TRICT DEFINITION OF TERM EMPLOYEE THEY ESCAPE THE TAX. NEITHER THE EMPLOYER PAYS TAX NOR ON SUCH TYPE OF EXPENDITURE NOR THE BENEFICIARY IS INDIVIDUALLY TAXED. SECTION 115WB(2) COVERS SUCH TYPE OF CASES BY WAY OF EXPANDING THE SCOPE OF FRINGE BENEFIT TAX . 24. NOW, COMING TO THE FACTUAL MATRIX OF THE CASE. WE HEREBY DISCUSS THE DIFFERENT HEADS ONE BY ONE. (A) SALES PROMOTION - RS. 3,79,14,000/- : - LEARNED AR HAS SUBMITTED THAT THESE EXPENSES ARE IN THE NATURE OF PRINTING PRODUCT BROCHURE, FORMS, PRODUCT BOOKLETS ETC. AND HAS FURTHER PLEADED THAT THESE TYPE EXPENSES HAVE BEEN SPECIFICALLY EXCLUDED FROM THE AMBIT OF FRINGE BENEFIT TAX BY PROVISOS (I) AND (IV) TO CLAUSE (D) OF SECTION 115W B(2). A PERUSAL OF CLAUSE (D) OF SECTION 115WB(2) REVEALS THAT THE EXPENSES INCURRED ON THE ACTIVITIES OF SALES PROMOTION INCLUDING PUBLICITY HAVE BEEN SPECIFICALLY INCLUDED AND SUBJECTED TO FRINGE BENEFIT TAX. WHAT HAS BEEN EXCLUDED IS THE ADVERTISEMENT IN ANY PRINT OR ELECTRONIC MEDIA OR TRANSPORT SYSTEM AS PER CLAUSE (I); AND FURTHER AS PER CLAUSE (IV) ANY EXPENDITURE ON PUBLICATION OF ANY NOTICE REQUIRED TO BE PUBLISHED BY OR UNDER ANY LAW OR BY AN ORDER OF A COURT OR TRIBUNAL HAS BEEN EXCLUDED. SO THE CO NTENTION OF THE ASSESSEE THAT THE SAID EXPENSES ARE EXCLUDED UNDER CLAUSE (I) & (IV) OF CLAUSE (D) OF SECTION 115WB(2) IS WRONG. HOWEVER, WE MAY OBSERVE THAT THE EXPENSES IN CURRED ON PRINTING OF PRODUCT BROCHURE, FORMS, PRODUCT BOOKLETS ETC. ARE ORDINARY BUSINESS EXPENSES. THESE CANNOT BE SAID TO BE EXPENSES RELATING TO SALES PROMOTION. THE ASSESSING OFFICER HAS SUBJECTED THE SAID EXPENSES TO FRINGE BENEFIT TAX A S THE ASSESSEE HAS CLAIMED THE SAID EXPENSES UNDER SALES PROMOTION HEAD. THE ASSESSEE HAS NOT FILED ANY DETAILS/BIFURCATION AS TO WHICH OF THE EXPENSES ARE COVERED UNDER SALES PROMOTION AND WHICH OF THE EXPENSES ARE COVERED UNDER PRINT OF BR OCHURE AND FORMS WHICH CAN BE SAID TO BE ORDINARY BUSINESS EXPENSES. UNDER SUCH C IRCUMSTANCES, A PROPER COURSE WILL BE TO REMAND BACK THE CASE TO THE FILE OF THE ASSESSING OFFICER FOR DE-NOVO ASSESSMENT GIVING OPPORTUNITY TO THE ASSESSEE TO FI LE THE BIFURCATION/SPLIT UP OF ICICI PRUDENTIAL LIFE INSURANCE COMPANY LTD. 19 EXPENSES CLAIMED UNDER SALES PROMOTION. THE ASSESS ING OFFICER AFTER GIVING PROPER OPPORTUNITY OF HEARING TO THE ASSESSEE AND AFTER VE RIFICATION OF THE DETAILS WILL ASSESS AND SUBJECT THE EXPENSES INCURRED BY THE ASSESSEE T O FRINGE BENEFIT TAX EXCLUDING THE EXPENSES INCURRED ON PRINT PRODUCT BROCHURE, FORM, PRODUCT BOOKLETS ETC. WHICH IN OUR VIEW ARE ORDINARY BUSINESS EXPENSES. (B) INCENTIVE AND CONFERENCE RS. 4,77,86,000/- : - THE REVENUE HAS COME INTO APPEAL AGAINST THE DELETI ON OF THE SAID EXPENSES. LEARNED CIT(A) HAS DELETED THE SAID EXPENSES CONSID ERING THE SUBMISSIONS OF THE ASSESSEE THAT THE SAME ARE IN THE NATURE OF PERFORM ANCE BASED INCENTIVES TO AGENTS. HOWEVER, NO BIFURCATION/SPLIT UP OF THE EXPENSES HA S BEEN GIVEN BY THE ASSESSEE. IT IS OBSERVED THAT THE COMMISSION OR INCENTIVES, WHICH A RE TAXABLE AT THE HANDS OF THE INDIVIDUAL BENEFICIARY, CANNOT BE SUBJECTED TO FRIN GE BENEFIT TAX. HOWEVER, INCENTIVES AND PERQUISITES PAID COLLECTIVELY TO THE AGENTS WIL L SPECIFICALLY ATTRACT THE PROVISIONS OF SECTION 115WB(2). UNDER CLAUSE (C) OF SECTION 115WB (2), EXPENSES INCURRED ON CONFERENCE HAVE BEEN SPECIFICALLY INCLUDED. CBDT CI RCULARS ANSWER TO QUESTION NO.56 AS REPRODUCED ABOVE IS ALSO CLEAR IN THIS RESPECT. IN TERMS OF OUR ORDER AS UNDER HEADING SALES PROMOTION WE RESTORE BACK THE CASE TO THE ASSESSING OFFICER WHO AFTER GIVING AN OPPORTUNITY TO THE ASSESSEE, WILL VERIFY AS TO WHICH EXPENSES ARE LIABLE TO BE SUBJECTED TO FRINGE BENEFIT AND WHICH OF THE EXPENS ES ARE NOT TAXABLE UNDER THE SAID HEAD. (C) AGENTS RETRAINING AMOUNTING TO RS. 6,000/- :- AGENTS RETRAINING CANNOT BE SAID TO BE ORDINARY BUS INESS EXPENSES RATHER THE SAME ARE COVERED UNDER CLAUSE (C) OF SUB-SECTION 11 5WB(2) I.E. CONFERENCE AND CLAUSE (D) SALES PROMOTION, HENCE FINDINGS OF LEA RNED CIT(A) PERTAINING TO ABOVE SAID EXPENSES ARE UPHELD. (D) AGENTS SALES MATERIAL RS. 3,06,00,000/- : - THE LEARNED AR HAS SUBMITTED THAT THESE ARE COVERED UNDER THE EXCLUSION CLAUSE (I) &(IV) OF CLAUSE (D) OF SECTION 115WB(2). ON THE OTHER HAND, LEARNED DEPARTMENTAL REPRESENTATIVE HAS SUBMITTED THAT THE ABOVE SAID CLAUSES ARE NOT APPLICABLE AND HENCE EXPENSES HAVE RIGHTLY SUBJECTE D TO FRINGE BENEFIT TAX. AS PER SUBMISSIONS OF LEARNED AR, THE SAID EXPENSES RELATE TO PRINTING PRODUCT PRESENTER, ICICI PRUDENTIAL LIFE INSURANCE COMPANY LTD. 20 PHOTOCOPY SALES LITERATURE ETC. IT IS AGAIN OBSERV E THAT THESE TYPE OF EXPENSES ARE NOT COVERED UNDER PROVISIONS OF (I) &(IV) TO CLAUSE (D) AS DISCUSSED UNDER THE HEAD (A), RATHER THESE TYPE OF EXPENSE CAN BE SAID TO BE ORDI NARY BUSINESS EXPENSES. IT IS AGAIN OBSERVED THAT NO DETAILS/ BIFURCATION ORSPLIT UP OF EXPENSES HAS BEEN GIVEN.IN VIEW OF OUR OBSERVATION UNDER THE HEADING (A), THIS ISSUE I S ALSO REMANDED BACK TO THE FILE OF THE ASSESSING OFFICER TO VERIFY THE DETAILS AND EXC LUDE THE EXPENSES WHICH ARE ORDINARY BUSINESS EXPENSES BEING INCURRED ON PRINTING PRODUC T PRESENTER, PHOTOCOPY SALES LITERATURE ETC. (E) THE AGENTS TRAINING RS. 1.57 CORES :- LEARNED AR HAS SUBMITTED THAT THE FOOD AND BEVERAGE S COMPONENT OF THESE EXPENSES HAS ALREADY BEEN OFFERED TO FRINGE BENEFIT TAX. OTHER EXPENSES SUCH AS STATIONERY, TRAINING MATERIAL, EQUIPMENT, VENUE CHA RGES ARE BEING CONSIDERED AS NORMAL BUSINESS EXPENSES AND ARE NOT LIABLE TO FRIN GE BENEFIT TAX. AS WE HAVE OBSERVED UNDER THE HEAD AGENTS TRAINING, SUCH TYPE OF EXPE NSES ARE COVERED UNDER CLAUSE (C)&(D) OF SECTION 115WB(2). HENCE, FINDINGS OF LEA RNED CIT(A) RELATING TO THESE COMPONENTS IS UPHELD. 25. IN VIEW OF OUR ABOVE OBSERVATIONS, BOTH THE APP EALS ARE HEREBY DISPOSED OFF BEING PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 15.2.2013. SD/- (RAJENDRA SINGH) ACCOUNTANTMEMBER SD/- (SANJAY GARG) JUDICIAL MEMBER MUMBAI; DATED : 15/2/2013 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) 4. CIT ICICI PRUDENTIAL LIFE INSURANCE COMPANY LTD. 21 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( (( ( ASSTT.REGISTRAR) ITAT, MUMBAI PS FIT FOR PUBLICATION AM JM