TaxTMI 
TaxTMI 
2004 (9) TMI 308
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....ifiers and engineering items. The assessee-company incurred an expenditure of Rs. 6,75,237 during the relevant previous year, towards foreign study expenses of Miss Reshma A. Lalwani, Miss Reshma A. Lalwani is the daughter of a director of the assessee-company and also an employee of the assessee-company. According to the assessee-company Miss Reshma A. Lalwani was sent to Britain for the higher study in business administration at the interest of the assessee-company. Miss Reshma Lalwani had entered into an agreement with the assessee-company that she would work in the assessee-company for a period of 5 years on return to India. It is the case of the assessee-company that she did in fact work for the company after returning to India. The sa....
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....peal is filed before us. 4. We heard Shri Prakash K. Jotwani, the learned advocate appearing for the assessee. He submitted that the distinction made by the AO with reference to the decision reported in 1978 CTR (Bom) 318 : (1978) 114 ITR 256 (Bom) is not justified. He contended that the facts of the present case are different from the facts of the case reported in (1994) 209 ITR 383 (Bom), and relied on by the AO. In the case of the decision relied on by the AO, the son of a partner of the assessee-firm was sent abroad whereas in the present case Miss Reshma Lalwani is one of the employees of the assessee-company even though she happens to be the daughter of one of the directors. She had entered into an agreement with the assessee-company....
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.... the assessee-company. The assessee-company is in a better footing in the present case. Not only that, Miss Reshma Lalwani on returning to India continued to work for the assessee-company in compliance of the agreement she had entered into with the assessee-company before leaving India. She has been further made as a director of the assessee-company. Therefore, the relation of Miss Reshma Lalwani to one of the directors of the assessee-company as such need not disqualify her from being sent abroad for higher studies by the assessee-company. The only reason pointed out by the AO to distinguish the present case from the decision reported in 1978 CTR (Bom) 318 : (1978) 114 ITR 256 (Bom) is that the subject studied by Miss Reshma Lalwani does n....
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.... much against the assessee. 8. Furthermore, it is to be seen that the AO has allowed the same expenditure for the immediately succeeding asst. yr. 1998-99 in the case of Miss Reshma A. Lalwani herself. Therefore, we do not find any reason why the expenditure incurred for the same event should not be allowed in the impugned asst. yr. 1997-98. 9. Therefore, we direct the AO to treat the amount of Rs. 6,75,237 as a business expenditure and allow the same as deduction in computing assessee's taxable income. 10. The next ground raised by the assessee is that the CIT(A) has erred in confirming the disallowance of sundry expenses of Rs. 4,000. This ground is dismissed as not pressed. 11. The third ground raised in this appeal is that the C....