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2014 (1) TMI 1140 - AT - Income TaxWhether education expenses of directors is allowable business expense - Held that:- Following Hansraj Mathuradas Vs ITO [2012 (10) TMI 300 - ITAT, MUMBAI] - As per Board Circular No. 8/2005 dated 29-08-2005 - Fringe benefit tax is levied on the expenses incurred by the employer irrespective of whether the same are incurred for official or personal purposes - Once fringe benefit tax is levied on such expenses as has been done in the present case, it follows that the same are treated as fringe benefits provided by the assessee as employer to its employees and the same have to be appropriately allowed as expenses incurred wholly and exclusively incurred by the assessee for the purpose of its business. Following Sakal Papers Pvt. Ltd. Vs CIT [1977 (11) TMI 36 - BOMBAY High Court] - The expenditure in question has been incurred by the assessee for the professional higher education of its employees (directors) for reaping the benefit of the said higher education and accordingly the said expenditure is an allowable business expenditure - Decided in favour of assessee. Ad-hoc disallowance of Vehicle Expenses & Depreciation on Vehicle - Held that:- No specific averment or incident has been brought on record to indicate that the vehicle has been used other then the business purposes - Even otherwise in the case of company if it is found that the vehicle has been used for personal purpose then it can be considered as perquisites in the hands of the user employee - Decided in favour of assessee. Disallowance of bad debts - Held that:- The assessee has failed to establish that the amount paid to the employee was for the purpose of the business of the assessee - Advancing loan which is not the business activity of the assessee and further having no nexus with the business of the assessee cannot be allowed as bad debts or business loss, if the assessee is not able to recover the same - Decided against assessee.
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