TaxTMI 
TaxTMI 
TaxTMI 
2018 (7) TMI 491
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.... 'A', Mumbai in relation to Assessment Year 1997-98. The Appeal was admitted on 2.9.2014 on the following substantial question of law: "Whether the Tribunal erred in law in disallowing an amount of Rs. 11,76,540/- as a business expenditure under the Income Tax Act, 1961 ?" Factual matrix: 2 The Appellants-Assessee is a closely held industrial company engaged in manufacturing copper foils at District: Gandhi Nagar. It's administrative office is at Mumbai. During the previous year ending on 31.3.1997, the Appellant-Assessee incurred expenditure of Rs. 11,76,540/- under the head 'Management Training and Development expenditure'. It was incurred for higher education and training of Shri Harsh Kumar who had been sent to US....
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....s submitted that the Tribunal had erred in confirming disallowance by ignoring evidence i.e. appointment letter of concerned employee, copy of resolution passed by the Board of Directors, agreement with the concerned employee and the fact that concerned employee was serving Appellants-Assessee after completing his education and training abroad. Mr. Sharma thus submitted expenditure incurred by the Appellants for education and training of it's employee was for securing better administration of the Appellants and the fact that the concerned employee was serving Appellants-Assessee after completing education and training has established a 'nexus' between the expenditure incurred by the Appellants and it's business. Mr. Sharma a....
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....re, it cannot be said that Appellants-Assessee have established nexus between the expenditure and its business activities. He has also submitted that course in 'Business Administration' was readily available in India and Appellants have not placed on record any material as to why employee was sent to USA ? 10. Mr. Suresh Kumar in support of his submission has relied on following two judgments: (1) Shreenath Motors (P) Ltd. v. Commissioner of Income-tax-V, Mumbai; [2014] 365 ITR 538 Bom; (2) Divyakant C. Mehta v. Income-tax Officer, 11(2)(2) [2014] 46 taxmann.com 266 (Bombay). 11. We have gone through the facts of the case as well as judgments cited by the Appellants as well as by the Revenue. 12. In the case of Sakal Pa....
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....iness profits of the Company for the Assessment Year 1961- 62?" That in the Reference, reasons given by the Tribunal were found unsustainable and as such, Reference was answered in affirmative in favour of the Assessee. In our view, the facts in the case of Sakal Papers (Supra) were altogether different in-as-much as in the said case, daughter of the director was post-graduate in Arts with English and French subjects and was serving with the company in editorial department nearly for five years before she was sent for the training and further education in journalism. That after securing degree from reputed university in USA, she again started working with editorial department of Sakal Papers. Thus, there was dependable evidence to hold th....
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.... of this Court after taking survey of various judgments including that of Divyakant C. Mehta (Supra) upheld the orders of Authorities and dismissed the appeal filed by the Appellant. 14. It may be stated that in the case of Divyakant C. Mehta (Supra), the Appellant-Assessee had claimed deduction of Rs. 22,25,614/- as expenditure incurred for higher education for his daughter. Justification for the said deduction was that she joined his firm of advocates and had given undertaking that on attending higher qualification and degree from university abroad, she would join firm for minimum period of five years and thus, said expenditure was incurred for the business of the Assessee and was allowable as deduction. Facts of the case in hand are alm....