Business expenditure on trainee education disallowed for lack of business nexus; factual findings raised no substantial question of law.

Education expenses for a trainee sent abroad were disallowed as business expenditure because no satisfactory evidence showed a regular appointment or a business nexus with the assessee's operations. The concurrent factual findings were that the spending was incurred because the trainee was the son of a director, not because of a demonstrated business requirement. Those findings were treated as pure questions of fact, and in the absence of perversity or legal error, no substantial question of law arose for interference under section 260A. The appeal accordingly failed in favour of the Revenue.

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Issues: Whether education expenses incurred for a trainee sent abroad for higher studies were allowable as business expenditure under section 37(1) of the Income-tax Act, 1961, and whether any substantial question of law arose for interference under section 260A.

Analysis: The claim depended on whether the trainee was shown, on evidence, to have been engaged in a capacity connected with the assessee's business. No satisfactory documentary material established a regular appointment or a business nexus for the expenditure. The concurrent findings recorded that the expenses were incurred because the trainee was the son of a director and not on the basis of a demonstrated business requirement. Such findings were treated as pure findings of fact, and no perversity or legal error was shown.

Conclusion: The expenditure was not allowable under section 37(1), and no substantial question of law arose for consideration. The appeal failed in favour of the Revenue.

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