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2018 (12) TMI 270 - AT - Income TaxDisallowance on account of education sponsorship expenses - allowable business expenditure - Held that:- We concur with the submissions of the Sr.DR namely that all educational expenses of the children or grand children of the Directors of the companies who ultimately may also join the family business by itself, cannot be said to be an expenditure which can be said to have been incurred wholly or exclusively for the business purposes of the assessee as the expenses for educating the children and grand children of the Directors can very well be personal expenses of the parents etc. We are conscious of the decisions wherein serving employees of the assessee companies who even if related have been sponsored for higher education on the undertaking that on their return, they shall join the said concern. Similarly there are decisions wherein loans may have been advanced to the children of the employees/Directors, sent for higher education with an undertaking to return and rejoin the assessee company etc. where the loan advanced is deducted from the salary paid etc., thus there can be no blanket decision that the higher education expenses of the Director’s children necessarily are business expenses. The argument that similar expenditure has been allowed for the very same relative in the earlier year which though not demonstrated on facts but even if it is correct that no disallowance was made in the earlier year by itself cannot lay down a precedent to be followed that the expenses allowed by oversight necessarily be allowed in the subsequent years. Accordingly, the impugned order is set aside back to the file of the CIT(A) with a direction to address the correct facts and pass a speaking order in accordance with law after giving the assessee a reasonable opportunity of being heard. - Decided in favour of assessee for statistical purposes.
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