FBT calc. while exps r apportioned to subsidiary

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Dongre Arun (Querist)
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25 January 2008 Pls. clarify this, (with ref to Sec.115W)

There are 2 companies say A & B. Let B is subsidiary of A. Now a part of exps incurred by A is apportioned to B, as it is expended for B.

While calculating FBT of both A & B, where is the apportioned FBTable exps are taxed…? I.e. in former or in latter…?

re,

Dear one,
Arun Dongre

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)
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25 January 2008 As compay A incurrs the expenditure, it has to pay FBT. When it apportions the expenditure and raises debit note on company B, in respect of the apportioned share of expenditure (including the FBT), it has to give the split details of actual expenditure apportioned and the FBT apportioned.

Dongre Arun

Dongre Arun (Querist)
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25 January 2008 So we've to calculate FBT in A co.
If there any sec ref. supporting ur words?
Pls reffer if there is....

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)
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25 January 2008 You also have an alternative as stated in the circular No. 8/2005-FAQs. Q No.33:

The company A and B after sharing the expenditure between themselves, pay FBT on their respective shares.(But problem can arise if company B does not have any employees, when you may have to go to the first alternative).

The idea in both alternatives is that FBT should not be omitted to be paid when it is due.