Tata Steel Ltd, Mumbai vs Department Of Income Tax

BEFORE S/SHRI VIJAY PAL RAO (JM) AND D. KARUNAKAR RAO, (AM) सव ी वजय पाल राव, या यक सद य एवं डी. क णाकर राव, लेखा सद य के सम

आयकर अपील सं./I.T.A. No.1728/Mum/2011 ( नधारण वष / Assessment Year :2006-07)

Dy.Commissioner of Income बनाम/ M/s Tata Steel Ltd, Tax, -2(3), Bombay House, Vs. Room No.555, 5th floor, 24, Homi Mody Street, Aayakar Bhavan, Fort, M K Road, Mumbai-400001 Mumbai-400020 (अपीलाथ /Appellant) .. ( यथ / Respondent)

आयकर अपील सं./I.T.A. No.1816/Mum/2011 ( नधारण वष / Assessment Year :2007-08)

Dy.Commissioner of Income बनाम/ M/s Tata Steel Ltd, Tax, -2(3), Bombay House, Vs. Room No.555, 5th floor, 24, Homi Mody Street, Aayakar Bhavan, Fort, M K Road, Mumbai-400001 Mumbai-400020 (अपीलाथ /Appellant) .. ( यथ / Respondent)

आयकर अपील सं./I.T.A. No.2376/Mum/2012 ( नधारण वष / Assessment Year :2008-09)

Asstt.Commissioner of Income बनाम/ M/s Tata Steel Ltd, Tax, -2(3), Bombay House, Vs. Room No.552, 5th floor, 24, Homi Mody Street, Aayakar Bhavan, Fort, M K Road, Mumbai-400001 Mumbai-400020 (अपीलाथ /Appellant) .. ( यथ / Respondent)

थायी ले ख ा सं . /जीआइआर सं . /PAN/GIR No. :AAACT2803M

अपीलाथ ओर से / Revenue by Shri Neil Philip यथ क ओर से/ Assessee by Shri Raj A Kapadia 2 I T A N o s . 1 7 2 8 / M/ 1 1 , 1 8 1 6 / M/ 1 1 a n d 2 3 7 6 / M/ 2 0 1 2 सन ु वाई क तार ख / Date of Hearing : 5.5.2015 घोषणा क तार ख /Date of Pronouncement : 5.5.2015

आदे श / O R D E R

PER VIJAY PAL RAO (JM)

These three appeals by the Revenue are directed against the three

separate orders of the ld. CIT(A) for the AYs.2006-07 to 2008-09 respectively.

2. The revenue has raised common grounds in these appeals. For the sake

of convenience, grounds of appeal taken by the revenue in the assessment year

2006-07 are reproduced below:

"On the facts and in the circumstances of the case, and in law, the ld.CIT(A) has erred in allowing relief to the assessee to the extent impugned in the grounds enumerated below:

1. The ld.CIT(A) is opposed to law and f acts of the case;

2. On the facts and in the circumstances of the case and in law, the ld.

CIT(A) erred in holding that sales promotion expenses of Rs.6.52 cores cannot be charged under FBT without appreciating that the sales promotion expenses is to be included in the value of taxable fringe benefits as provided u/s 115WB(2) of the IT Act.

3. For these and other grounds that may be urged at the time of hearing, the decision of the CIT(A) may be set aside and that of the AO restored"

3. We have heard the ld.DR and ld AR and considered the relevant material

available on record. At the outset, we note that the issue involved in the

revenue's appeals is now covered by the judgment of the Hon'ble Jurisdictional

High Court in the case of CIT V/s Tata Consultancy Services Ltd in Income Tax

Appeal No.1132 of 2013 dated 24.3.2015. The findings of the Hon'ble

Jurisdictional High Court held in paragraphs 8 to 10 are reproduced below:

"8. We need not make a detailed reference to this circular. Suffice it to note the Budged Speed of the Minister of Finance while presenting the Budget for the year 2005-06, the explanatory notes and the circulars have been rightly understood by the Tribunal to mean that the basis of tax is 3 I T A N o s . 1 7 2 8 / M/ 1 1 , 1 8 1 6 / M/ 1 1 a n d 2 3 7 6 / M/ 2 0 1 2 the benefit or perquisites which emanate out of an employer-employee relationship. That is a prerequisite and for levy of fringe benefit tax. The Tribunal, in paragraph 8 and 9 has concluded that in the present facts and circumstance, no such case as would enable charging fringe tax emerges. The subscription amount has been paid as per the contractual agreement between the assessee and M/s Tata Sons Limited. The invoices raised by M/.s Tata Sons Limited are for the services provided and there is no employer-employee relationship between the parties.

9. We do not find that such a conclusion is perverse. Mr. Andhyarujina is, therefore, right in relying on the materials which have been handed into us and which find place equally in the Tribunal's order. Those have been referred to and in the relevant factual backdrop so also on perusal of the agreement in its entirety, that the tribunal concluded that there is no merit in the Revenue's appeal.

10 .We are of the opinion that the tribunal's order based on the above material is neither perverse nor vitiated by any error of law apparent on the face of the record. This appeal does not raise any substantial question of law. It is dismissed. No order as to costs.."

We note that the issue and facts in the appeals before us are common as in the

case of Tata Consultancy Services Ltd (supra) the fringe benefits is assessed by

the AO in respect of sales promotion expenses arising from Tata Branch Equity

And Business Promotion Agreement with the Tata Sons for the purposes of

pooling of resources of various TATA companies and make a cooperative effort

to promote a united common TATA Branch to match the brand equity of well

known international brand names. Therefore, expenses in question are on

account of payment for use of brand as per the agreement with TATA Sons Ltd

which is common in the present case as well as case of TATA Consultancy Ltd..

Accordingly, following the judgment of the Hon'ble Jurisdictional High Court in

the case of TATA Services (supra), we do not find any error or illegality in the

order of ld. Ld.CIT(A) and hence we dismiss all the three appeals filed by the

revenue.

4 I T A N o s . 1 7 2 8 / M/ 1 1 , 1 8 1 6 / M/ 1 1 a n d 2 3 7 6 / M/ 2 0 1 2

4. In the result, all the appeals filed by the Revenue are dismissed.

The above order was pronounced in the open court on 5TH May, 2015. घोषणा खल ु े यायालय म दनांकः 5th May, 2015 को क गई ।

Sd sd (डी. क णाकर राव/D. KARUNAKAR RAO) ( वजय पाल राव/VIJAY PAL RAO) लेखा सद य / ACCOUNTANT MEMBER या यक सद य / JUDICIAL MEMBER मुंबई Mumbai: 5th May, 2015.

व. न.स./ SRL , Sr. PS

आदे श क त ल प अ े षत/Copy of the Order forwarded to :

1. अपीलाथ / The Appellant

2. यथ / The Respondent.

3. आयकर आयु त(अपील) / The CIT(A)- concerned

4. आयकर आयु त / CIT concerned

5. वभागीय त न ध, आयकर अपील य अ धकरण, मुंबई / DR, ITAT, Mumbai concerned

6. गाड फाईल / Guard file.

आदे शानुसार/ BY ORDER, True copy

सहायक पंजीकार (Asstt. Registrar) आयकर अपील य अ धकरण, मुंबई /ITAT, Mumbai