AI Drafter 
TaxTMI 
TaxTMI 
2018 (9) TMI 967
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.... Shastry as being not related to the business of the firm and in doing so, followed the decision of this Court in the case of M.Subramaniam Bros. vs. Commissioner of Income Tax reported in (2001) 250 ITR 0769 and the decision in Commissioner of Income Tax vs. R.K.K.R Steels reported in (2002) 258 ITR 0306. 3.The assessee contended that Mr.H.E.Sriprakash Shastry is the son of Shri.Eswara, one of the partners of the firm, who had completed his B.E.Civil Engineering in the year 2000 and became a partner of the firm in April 2000 and he was sent to the University of New South Wales, Sydney, Australia during February 2001 for specializing in construction management and upon completion of the higher education training, the said partner is continuing with the firm and specialized knowledge and training acquired by him in the field of Construction of Management is of immense benefit to the firm in its professional activities. 4.It is submitted that the higher studies and training, for which the expenditures were incurred, related to the professional activities of the firm and there is a direct nexus between the purpose for which the expenditures were incurred and the activities of th....
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....assed by the assessee by placing materials before the Assessing Officer or for that matter before the CIT(A) were not taken into consideration, then it goes to the root of the matter thereby, the Court would be empowered to test the correctness of the impugned orders as to whether the order suffered from non-application of mind or failure to look into the material information placed before the authorities, which would amount to an error of law. Therefore, after hearing the learned counsel for the parties on the factual aspects, we find that this appeal is entertainable and a substantial question of law arises for consideration. 11.As pointed out earlier, the Assessing Officer as well as the CIT(A) as well as the Tribunal did not go into the factual aspects of the matter, though placed before them by the assessee. Two decisions of the Hon'ble Division Bench of this Court in R.K.K.R Steels (supra) and M.Subramaniam Bros. (supra) were relied on to support the disallowance. It has to be seen as to whether these two decisions can apply to the facts and circumstances of the case. 12.Insofar as M.Subramaniam Bros. (supra) is concerned, the son of the assessee, who went abroad, was i....
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....nsidered it a professional necessity to send Mr.H.E.Sriprakash Shastry to Australia to specialize in the field of construction management at the University of New South Wales. This specialization was directly connected with profession carried on by the assessee and he was sent to University of New South Wales in February 2001. The assessee firm stated that foreign higher education and training of one of their partners will have an advantage in obtaining professional assignments from industrial projects promoted with foreign collaboration. 15.Materials were placed before the authorities below that after the partner completed his studies and returned back to India several multinational contracts were acquired by the firm as well as much professional fee was earned by the firm. These facts and figures were placed before the Tribunal and the authorities as well. Unfortunately, the Assessing Officer did not deal with any of the factual position placed by the assessee firm, but was merely guided by the fact that it is the son of one of the partners, who was sent for higher education abroad and there was no agreement between the firm and the partner that he should work for the firm ....
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....a) and Kohinoor Paper Products (supra), are clear answers to the contentions advanced by the Revenue. 21.The learned Standing Counsel for the Revenue contended that in the decision in the case of Commissioner of Income Tax and Another vs. RAS Information Technologies (P) Ltd., reported in (2011) 200 taxman 305 (Kar), the material on record disclosed that the son of the Managing Director entered into an agreement with the assessee company, under which he agreed to work for the company on completion of his course abroad and even while pursuing his post-graduation course in manufacturing and engineering abroad for which financial assistance was provided, he kept the company updated about the latest trends and developments in the field 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. 22.As pointed out by us earlier, substantial facts were placed before the three authorities, who concurrently ignored the same, as there is no considerable or discussion on the same. In fact, the Tribunal did not even attempt to examine the said issue, in spite of specific grounds being....
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.... graduate degree, the partner continued to work for the firm and materials were placed to show that several important contracts have been secured by the firm, which they attribute to the educational qualification and expertise acquired by the partner of the firm abroad. There was no material place by the Revenue to demonstrate that any part or whole of the stand taken by the assessee was either false or untrue. Viewed from this angle, this Court is fully satisfied that this is not a case where there is a misuse of the provision of Section 37 of the Act to foist a personal expenditure as a business expenditure. Therefore, we are of the considered view that the expenditure was allowable and the authorities concurrently erred in not taking into consideration the factual position placed, in spite of specific grounds raised before the Tribunal, which would render the decision perverse. 26.The learned Standing Counsel for the Revenue pointed out that no ground has been raised by the assessee stating that the finding rendered by the Assessing Officer, CIT(A) and the Tribunal are perverse. 27.Perusal of the grounds of appeal filed before the CIT(A) shows that the assessee has specifi....