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2014 (2) TMI 1072 - HC - Income TaxScope of Business expenditure u/s 37 of the Act - Whether the Tribunal fall into error of law in holding that the appellant’s claim that the amount has been spent for the higher education of son of the Director, was not liable as “business expenditure” u/s 37 of the Income Tax Act – Held that:- The burden of showing that expenditure would be wholly and exclusively for the purpose of business under Section 37(1) is upon the assessee and that personal expenditure cannot be claimed as business expenditure - there is nothing on record to suggest that such a transaction is not honest - Dushyant Poddar not only worked but his chosen subject of study would aid and assist the company and is aimed at adding value to its business. It would be unwise for the Court to require all assessees and business concerns to frame a policy with respect to how educational funding of its employees generally and a class thereof, i.e. children of its management or Directors would be done - Nor would it be wise to universalize or rationalize that in the absence of such a policy, funding of employees of one class – unrelated to the management – would qualify for deduction under Section 37(1) – that was not such an intent in the statute which prescribes that only expenditure strictly for business can be considered for deduction – thus, the expenditure claimed by the assessee to fund the higher education of its employee had an intimate and direct connection with its business, i.e. dealing in security and investments – thus, it was appropriately deductible under Section 37(1) – the AO is directed to grant the deduction claimed – Decided in favour of Assessee.
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