TaxTMI 
TaxTMI 
2022 (11) TMI 445
X X X X Extracts X X X X
X X X X Extracts X X X X
....ficer in respect of "Education Expenses" amounting to Rs.23,52,809 for Miss Sunaina Shah who is an employee of the assessee's architectural firm for her further studies in abroad without appreciating the facts of the case and judicial precedents on similar facts and considering the same as personal expense." 4. The facts relating to the said expenses being that the assessee, Sh.Snehal Mahendra Kumar Shah, is an architect and interior designer and the educational expenses of his daughter incurred by him, amounting to Rs.23,52,809/-, were in relation to advanced studies in the field of architecture from "Association School of Architecture, London, U.K", his daughter, Ms.Sunaina Shah, having cleared her Bachelors degree in architecture from CEPT University in the year 2015. 5. The contentions of the ld.counsel for the assessee before us was that the said expenses had been incurred wholly and exclusively for the purpose of the business of the assessee, and had not been incurred for the reason that Ms.Sunaina Shah was the daughter of the assessee. In this regard, he emphasised the fact that the assessee's daughter was a highly qualified architect working in the assessee's firm....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mportant centers of research and at the same time a distinctive and distinguished learning environment for undergraduates and graduate students in many scholarly and professional fields. Columbia University was founded in 1754 as King's College by royal charter of King George II of England. It is the oldest institution of higher learning in the state of New York and the fifth oldest in the United States. * Holds certificate of Registration from Council of Architecture in India for the period June 2015 to December 2016. Copy of the said registration is attached herewBn as Annexure-2D (page-31). The Council of Architecture (COA) has been constituted by the Government of India under the provisions of the Architects Act, 1972, enacted by the Parliament of India. The Act provides for registration of Architects, standards of education, recognized qualifications and standards of practice to be complied with by the practicing architects.: 6. Further our attention was drawn to para-4.5 of the impugned order reproducing submissions of the assessee to the effect that she had worked/interned with world-class architects, adding to her credentials: ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....heir pay-role found mention. From Para-4.11 it was pointed out that she was working actively on two research publications which were being brought out by the assessee. 8. Referring of the above, it was pointed out that the expenditure incurred was purely for commercial considerations and the assessee had obtained business gains out of the same. Our attention was drawn to the submissions of the ld.counsel of the assessee in this regard at para 4.13 of his order as under: "4.13. With such advanced education, she was sent outside the country for acquiring higher qualification, which would improve the services, qualitative standards, global outlook for design and structures while serving the clients. Merely because she happens to be the daughter of the owner of the business, it cannot be said that the money is just spent by her parents out of love and affection for higher education of their daughter. She was an employee of the assessee, in the field, in which, she has acquired degree and in fact, she continued with the firm at a minimum remuneration as compared to contemporaries even after obtaining and holding "two masters, one bachelor" degrees and hands on experience ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....urther contended that she is not drawing the salary equivalent to her qualification from the appellant's business at this point in time. A copy of agreement of work dated August, 2014 has been filed at page 40 of Paper Book. This agreement is signed on plain paper by father and the daughter. The particular date is discernible from this Annexure-5(page 40). Therefore, authenticity of this personal communication is not proved because of lack of third party independent credible evidence. The appellant has relied on the ratio of following case laws: i) Karnataka High Court in case of Mallige Medical Centre (P) Ltd. vs. JCIT ii) High Court of Karnataka in case of CIT Vs. RAS Information Technologies (P) Ltd. (2011) 238 CTR 0076 Hi) High Court of Bombay in case of Sakal Papers Pvt. Ltd. vs. CIT (1978) 1978 CTR 0318 (Bom) iv) Calcutta High Court in the case of Hindustan Aluminium Corporation Ltd vs CIT (159ITR673) v) Madhya Pradesh High Court in the case of CIT vs Kohinoor Paper Products (226 ITR220) vi) Madhya Pradesh High Court in CITvs Naidunia News & Networking (P) Ltd. (210 Taxmann 73) The appellant has tried his best....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed by the daughter of the assessee in this field of architecture and also the vast experience gathered by her by interning with various prominent and globally acclaimed architects. Emphasis has also been laid on the contract entered with her for rendering services for a period of five years ,after completing her education with the assesses firm. 14. We have considered all these facts and we have given our thoughtful consideration to the issue before us. We are not convinced with the contentions of the Ld.Counsel for the assessee. 15. What is not to be lost sight of is the very pertinent fact of the relationship between the assessee and Ms.Sunaina Shah - that of father and daughter (parent-daughter). In Indian society, it is the pious and moral obligation of parents to maintain their children till they are independent. Also a very important feature of the Indian society is family run businesses/profession, where from generation to generation the family carries on the same profession or business. Therefore, a doctor's children preferably become doctors and so on in other professions and businesses also. It is a very prominent feature in our society where majority of the busines....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the assessee but out of moral obligation as a father and the purpose of contracting her services for five years was strangely enough only to receive back what was paid for her education in terms of services rendered by her at lesser than normal rates. The contract is just an after-thought which not even binds the daughter for a reasonable period to contribute substantially to the assesses practice. 18. Further whether the assessee had ever incurred such expenditure on the education of any other employee in this firm, either in the past or in the future, has not been brought to our notice, so as to give weightage to the contention that such education expenses were incurred primarily with the intention of promoting its business or profession. 19. It was merely because these expenses were in relation to the daughter of the assessee that they were incurred by the assessee, and not dominantly because they were for the purpose of business of the assessee firm. Even if the daughter of the assessee was pursuing any other course, the father was morally bound to spend on the education of his daughter. Therefore, the fact that the daughter pursued the very same profession in which the f....