1996 (8) TMI 53

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....for separate assessment years. These applications relate to the consolidated order passed by the Tribunal on May 10, 1993, in I.T.A. Nos. 664/Ind. of 1988, 410/Ind. of 1990 and 453/Ind. of 1991 for the assessment years 1983-84 to 1985-86. These applications came to be filed because the applications submitted for reference and registered as R. A. Nos. 93 to 95/Ind. of 1993 were rejected on April 29, 1994. R. A. No. 94/Ind. of 1993--assessment year 1984-85 : "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in allowing Rs. 42,974 spent on the education of a partner in U.S.A. as business expenditure ?" R. A. No. 95/Ind. of 1993--assessment year 1985-86 : "Whether, on the facts and in the circums....

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....e appeal and thus allowed the deduction of the entire expenditure for these three years treating the same as revenue expenditure. Aggrieved, the Department filed the applications under section 256(1) of the Act. The applications were rejected. This is how the applicant has filed these applications under section 256(2) of the Act. We have heard Shri Vivek Sharan, learned counsel for the applicant, and Shri J. W. Mahajan, learned counsel for the non-applicant. Section 37(1) of the Act provides as under : "37. (1) Any expenditure (not being expenditure of the nature described in sections 30 to 36 . . . and not being in the nature of capital expenditure or personal expenses of the assessee), laid out or expended wholly and exclusively for th....

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....allowed as revenue expenditure in all the three assessment years." In Hindusthan Aluminium Corporation Ltd. v. CIT [1986] 159 ITR 673 (Cal), it was held that expenditure incurred in sending some employees to the U.S.A. for training and experience in running the factory, was a revenue expenditure and as such was an allowable deduction in terms of section 37 of the Act. In the instant case, the Tribunal concluded that after completion of studies, the aforesaid person kept himself engaged in the business of the firm and his higher education in U.S.A. and the experience gained by him proved beneficial to the firm. The Tribunal found that subsequent events also established the intention and purpose of sending Shri Deepak Bhargava abroad to ret....