TaxTMI 
TaxTMI 
2004 (1) TMI 319
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....alified CFA and was working in Nishigandha Trading (P) Ltd. since 1992. The company intended to diversify its business in the field of merchant banking, advising of public issue of shares, debentures, portfolio management, etc. For this purpose, it was decided by the Board of Directors to send, inter alia, the appellant to theLondonBusinessSchoolfor MBA course with specialisation in finance, which knowledge and experience would benefit the company in its business. The entire cost of higher education was borne by the company and the amount was directly paid to the University by the employer company after obtaining necessary RBI permission. 3. The employer company required the appellant to execute a bond to serve the company for seven years ....
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....he expenditure has been incurred by the employer company to benefit its own business; the benefit to the appellant is only incidental. The incurring of the expenditure was foremost and primarily prompted to equip the employer company to carry on business in the field of finance by having available person(s) having specialised knowledge and experience. 8. Sec. 17(2)(iv) of the Act applies in respect of any obligation of the employee met by the employer. The said section pre-supposes a pre-existing obligation, which the employee is to meet, but which is discharged by the ex-employer. In other words, if the employer had not stepped in to meet the expenditure, the employee would have been obliged to do so [CIT vs. Lala Shri Dhar (1972) 84 ITR ....
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....ncial Year Profit from sale of shares Dividend on shares Gain/loss from redm. of mutual fund units Dividend on units Vyaj Badla income Interest income Rs. Rs. Rs. Rs. Rs. Rs. 1999-00 3,44,316 20,989 -- -- 16,48,240 59,257 2000-01 6,53,132 58,977 2,717 1,54,860 2,10,122 -- 2001-02 2,76,980 95,361 94,491 8,72,918 -- 1,51,295 2002-03 1,550 1,89,890 1,33,138 -- -- 1,78,260 2003-04 upto 5th Dec., 03 6,78,845 1,59,822 122 1,553 -- -- Total 12,66,191 5,25,039 2,30,468 10,29,331 18,58,362 38,812 12. Hypothetically stating, in case the appellant was not to return toIndiaand not serve the employer company for the seven years period, the amount spent by the employer company would be recoverable fr....
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....airman to do whatever was needful, including sending some of its employees for study at the cost of the company, Mr. Natwarlal Gupta and Mrs. Sabita Gupta, expressed their willingness to pursue higher studies abroad and the cost was to be borne by the company. The most important condition of bearing the cost of their education abroad was that the employees on their return, must serve for 7 years in the company and in the event of not serving or quitting before the expiry of their seven year term, they were required to return the entire cost of education along with interest. The cost of the education was directly paid to the concerned university by the company. Necessary permission was obtained from RBI for the said purpose. An agreement was....
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....sored for higher education, no perquisite has been added in her hands. Different yardsticks cannot be adopted in the case of different assessees. For the reasons aforesaid, the addition on account of perquisite under s. 17(2)(iv) of the Act calls for being deleted." 15. On the other hand, learned Departmental Representative while relying on the findings of the authority below, contended that the amount in question has actually been paid by the employer in this case which is in respect of an obligation which was being payable by the appellant. The expenditure incurred was not at all having any connection with the business of the employer. The higher education has gone to the benefit of the appellant. Even after pursuing the higher education....
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.... prayer, therefore, has been made to reject the grounds taken by the appellant. 16. We have heard the parties with reference to material available on record and case law referred. The appellant is a specified employee whose income under the head salaries exceeds Rs. 24,000. The decision to undergo higher education abroad was taken by the employer of its own volition at the cost of the company. The appellant had agreed to the conditions before actually enrolling for MBA course inLondonBusinessSchool. In case the appellant did not return toIndiaafter completion of his studies, there lies a different remedy for contravention of the terms of agreement. But for that reasons alone, it cannot be said that payment was made on behalf of the employe....