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2021 (5) TMI 516 - AT - Income TaxDisallowance of the claim incurred towards fees paid to Babson College, USA, for a management trainee - Assessing Officer disallowed this amount on the ground that the expenditure cannot be treated as research & development expenses, there is no nexus between the expenditure of higher education for a management trainee and propagation of business of the assessee and the expenditure cannot be treated is business expenditure as it is incurred for future services to be obtained by the company.HELD THAT:- The genuineness of this agreement cannot be doubted in the absence of any adverse material. The fact is that, Mr. Karan Kanodia, is not related to any of the Directors of the assessee company. Mr. Karan Kanodia, is working for this company till date for more than a period of five (5) years after completion of his education and training on a small pay of ₹ 50,000/- p.m. only. As relying on M/S. GOURNITYE TEA & INDUSTRIES LTD. VERSUS COMMISSIONER OF INCOME TAX CIRCLE I [2010 (6) TMI 764 - CALCUTTA HIGH COURT] Expenditure in question has to be allowed. Booking expenditure under a wrong head of expenditure cannot be a ground for disallowance. The expenditure was incurred for the purpose of business and hence the same is allowed. Appeal of the assessee is allowed.
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