The Chamber's Journal April 2013

Page 141

DIRECT TAXES – Tribunal running the educational institution on commercial basis and violation of provisions of s 13(1)(c), as mere finding that the objects of the trust have been altered without the consent of the department would not be sufficient to exercise the power under section 12AA(3) without giving ~ charitable; further, proviso to section 2(15) did not apply to educational institutions.

On appeal the Tribunal held that the Commissioner’s action deleting the addition under section 68 of the Act was in consonance with the relevant provisions of section 68 of the Act. Addition for unexplained advances under section 68 should be deleted if plausible explanation is offered by assessee even during appellate proceedings.

#$ % **+;< of the Act – Payment made to group 1. Cash Credit – Section 68 of the company towards Brand Equity Income-tax Act, 1961 – Burden of contribution – Would be outside Proof – During appellate proceedings, the purview of Fringe Benefits Tax assessee filed detailed including (‘FBT’) – As expenses did not contain assessee's account in books of creditors an element of personal benefit to as well as their PAN – Commissioner employees nor there was employer (Appeals) found the explanation to and employee relationship between be plausible explanation within assessee and the company to which meaning of section 68 and deleted contribution was made. A.Y. 2007-08 addition – Even if the assessee gives Asstt. CIT vs. Tata Consultancy Services Ltd. [I.T.A. plausible explanation regarding No. 3457 / Mum / 2011; Order dated 26-9-2012] unexplained advances during appellate The assessee had paid an amount to one of its proceedings, the addition under group concerns towards Brand equity contribution. section 68 was liable to be deleted. In consideration of this subscription, the group concern, was, responsible for organising corporate A. Y. 2007-08 identity and brand promotional activities and UNREPORTED

I.T.O. vs. Sains Engg. Works [I.T.A. No. 980 / Chd / 2010; Order dated 27-9-2012]

campaigns engage professional consultants, make available a pool of sharable resources of the group } = ! to the assessee and provide assistance in accessing 68 in respect to certain advances received by the the network of domestic and international business assessee, for non-furnishing of PAN and bank contacts and also permitted the company to use the account number. During the course of appellate business name. The assessee debited the payment proceedings before the Commissioner, the assessee under the account head ‘Sales promotion’. The ! ! ! assessee claimed that these expenses so debited of assessee's account in books of loan creditors, to sales promotion head are not liable for FBT wherein PAN were indicated, also, the amount and therefore the same may be excluded from matched with the entries in the assessee's account 4 } = ~ in the books of creditors. The Commissioner after assessee’s claim and included the said expenses calling for the report from the Assessing Officer for the calculation of the total value of FBT and ! ! accordingly completed the FBT assessment to be plausible explanation within the meaning of On appeal the Tribunal held that the rationale for section 68 and deleted the addition. introduction of FBT was that it was difficult to

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The Chamber's Journal April 2013

141

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