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2018 (12) TMI 530 - HC - Income TaxDisallowing the business expenditure claimed as incurred for the higher education abroad of the son of a Director of the assessee company, who was also the Managing Director of a subsidiary company and who was later appointed as a Director of the assessee company itself - Held that:- 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. The contention raised, based on the resolution passed by the subsidiary 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 love and affection the Board Members have, towards the person deputed especially noticing the fact that it is a closely held private limited company wherein all the Directors are siblings or closely related. - Decided in favour of the revenue.
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