TMI Blog2018 (12) TMI 530X X X X Extracts X X X X X X X X Extracts X X X X ..... bsidiary company at Annexure B cannot be upheld. Annexure B resolution indicates that the subsidiary company had agreed to lend the person on deputation basis after his study in USA to the assessee company for a period of ten years. The decision taken by the subsidiary company does not bind the holding company. There is also no resolution seen of the holding company, deciding to send the Managing Director of the subsidiary company for higher studies and then take him into the fold of the holding company itself, by reason only of the education he acquired in the foreign country. The further resolution at Annexure C is by the assessee company wherein the Board merely agreed to reimburse the expenses. This again would be only by reason of l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of accounting and the liability accrued on the resolution of the Board of the assessee Company? 2. On facts it has to be noticed that the assessee is a publishing Company engaged inter alia in the publication of a popular vernacular newspaper. The assessee also had a subsidiary Company by name Kaumudi Cyber Studio (P) Ltd. , in which one Deepu Ravi was the Managing Director. The said Deepu Ravi was also the son of one of the Directors of the assessee Company. The said person was send to USA for higher studies and after completion of the same, on his return, the assessee company had appointed him as a Director. 3. Pursuant to his appointment as a Director, noticing the fact that there was a resolution of the subsidiary company at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The High Court concurred with the finding of the Tribunal. In Sakal Papers (P) Ltd . again, the expenditure claimed as business expenditure was that incurred in sending the daughter of the Directors of a publishing Company, abroad, for specialised higher studies and to obtain practical training in Printing and Lithography. The daughter was working in the editorial department of the company when she was sent for higher studies. The company being engaged in publishing a leading Marathi newspaper and the person who was deputed for higher studies being employed in the company, as also studies, for which the person was sent abroad, being closely related to the business of the company, Bombay High Court allowed the same as business expenditur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at he joined the company as a director. 8. We agree with the Tribunal that the present case is similar and identical to that considered by the Madras High Court. The distinguishing factor in these two cases from the other two are that the person who had been deputed for higher studies was totally unconnected with the assessee Company. In Sakal Papers , the daughter of the Director was employed in the Company and in Kohinoor Paper Products the son of the Director himself was a Director. Here the son of the Director of the assessee company, send for higher studies was a Managing Director in one subsidiary company. Definitely the subsidiary company could have claimed the expenditure as business expenditure, but, not the assessee Company. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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