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2022 (11) TMI 445 - AT - Income TaxNature of expenditure - Allowable business expenditure or personal expenditure - claim of education expenses of the daughter of the assessee which was denied by the authorities below holding the same to be personal in nature, and alternatively capital in nature - assessee submitted assessee’s daughter was a highly qualified architect working in the assessee’s firm and wanted to pursue higher education; that she had studied in various prominent institutions , interned with globally acclaimed architects and had a huge repertoire of knowledge and expertise and had agreed to work with the assessee for five years after completing her education - HELD THAT:- The contract mentions the agreement being entered to pay back the expenses incurred on her education by her father, as she was contracted to work on minimum wages and not actual salary. This is definitely not a normal contract which any father would enter with his daughter and the purpose appears to be to receive back in terms of her services what was paid by her father, the assessee, for her education. This in itself shows that education expenses were not incurred with the intention of furthering the business of the assessee but out of moral obligation as a father and the purpose of contracting her services for five years was strangely enough only to receive back what was paid for her education in terms of services rendered by her at lesser than normal rates. The contract is just an after-thought which not even binds the daughter for a reasonable period to contribute substantially to the assesses practice. Whether the assessee had ever incurred such expenditure on the education of any other employee in this firm, either in the past or in the future, has not been brought to our notice, so as to give weightage to the contention that such education expenses were incurred primarily with the intention of promoting its business or profession. As merely because these expenses were in relation to the daughter of the assessee that they were incurred by the assessee, and not dominantly because they were for the purpose of business of the assessee firm. Even if the daughter of the assessee was pursuing any other course, the father was morally bound to spend on the education of his daughter. Therefore, the fact that the daughter pursued the very same profession in which the father was , was not a material fact for incurring the expenditure. As also stated above by us, that the business of the assessee remained in the family alone, was also a major contributing factor for the father to incur this expenditure. Therefore, the primary and dominant purpose for incurring this expenditure was personal consideration and not professional consideration. With the logic advanced by assessee, every professional firm or business, incurring educational expenses for their progeny/ children would all claim the same as if for furtherance of their business, but it is not the case. The primary motive for incurring the expenses is to continue to carry the legacy of business and profession in the family and is purely personal in nature. We have no iota of doubt in holding the impugned expenditure as personal and not allowable therefore as business expenditure. Appeal of the assessee is dismissed.
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