2010 (7) TMI 670

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....ity. 2. These two appeals arise out of two assessment orders i.e., 1997-98 and 1998-99 wherein, deductions are on identical grounds. 3. One Arun Srinivasan, who is the son of the Managing Director of the assessee company was sent to U.S.A. for higher studies. The assessee spent money towards his education and the said amount was claimed as deduction under section 37(1) of the Act and the said deduction was disallowed by the Assessing Officer, which order was confirmed by the Appellate Authority. The Tribunal held that the case falls under section 37(1) of the Act. and the deduction was permissible. Aggrieved by the said order, the revenue is in appeal. 4. This appeal was admired on 4-1-2007 to consider the following substantial que....

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....s on record that, the assessee is rendering consultancy service in the field of manufacturing and engineering. In fact Arun Srinivasan was an engineering graduate. It is for pursuing his post-graduation course in manufacturing and engineering, abroad, that financial assistance was provided. The material on record shows that during the course of pursuing his post-graduation course at USA, he kept the company updated about the latest trends and developments in the filed and was also sending key inputs in the form of articles, research papers etc., to enable the company to keep itself updated of the technical know-how and knowledge. For the subsequent years, the assessee-company has shown higher turnover and higher profit. 7. In the backgro....

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.... is entitled to the benefit of deduction under section 37 of the Act. In other words, the money spent by an assessee either in sponsoring a student or towards educational expenses of a student, in a discipline, in which the assessee is carrying on its business, is a valid expenditure and is entitled to deduction. 9. In the instant case, the son of the Managing Director is an Engineering Graduate. Assessee is a consulting agency in manufacturing and engineering Industry. They have sponsored the candidature of Sri Arun Srinivasan, to pursue his post-graduation course in engineering. In that regard, they have entered into a written contract. While pursuing the studies, the student has rendered services, which is acknowledged by the assessee....