TMI Blog2006 (2) TMI 502X X X X Extracts X X X X X X X X Extracts X X X X ..... t year 1998-99 Rs. 11,99,530 Assessment year 1999-2000 Rs. 6,10,567 2. The facts giving rise to these appeals are that the assessee is a Chartered Accountant. He completed his C.A. in 1994 and articleship in 1995. He claims that he is an all India rank holder with certificate of merit. His profession is of consultancy in management, finance and investment Banking. The assessee, while carrying out his profession, proceeded to USA for doing MBA between August 1996 and May 1998. During August 1996 to May 1998, assessee did not get any employment in USA but from August 1998, he started earning salary income from employment in USA. The assessee visited India during this period. He had filed return of income showin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n advantage of enduring nature. It will increase his income-earning capacity, better contacts and higher fees and, therefore, it is a capital expenditure. The Assessing Officer relied on the decision of the Hon ble Bombay High Court in the case of CIT v. Hindustan Hosiery Industries [1994] 209 ITR 383 , wherein expenditure incurred by the firm for higher studies to USA was not allowed as business expenditure as there was no nexus between the expenditure and the business of the assessee. Further, according to Assessing Officer, this expenditure is of personal in nature and cannot be allowed. On the other hand, the Learned CIT(A) allowed the claim of the assessee as under : "I agree with the contentions of the AR that degree of MBA acqu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... new degree and, therefore, expenditure is not allowable is not tenable. Regarding the contention that the new degree is an asset and advantage of enduring nature it is stated that various Courts as stated above has laid down that expenditure on foreign travel and education expenses directly connected with the business of the assessee are allowable expenditure. Once it is held that the expenditure is incurred on education related to the field of business/profession, same has to be allowed and cannot be held as an advantage of enduring nature. As far as contention that the appellant has not returned from USA and will help him in his profession in USA is concerned, AR has stated that appellant has stayed there to gain first hand working experi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or Paper Products [1997] 226 ITR 220 (MP). Against this, the Learned A.R. for the assessee submitted that there is a direct nexus of the assessee s profession with the new degree acquired. It has enhanced its value in commercial market. Further, combination of two branches results into new field which is very important in a commercial world. A manager with CA degree or a CA with management degree has greater value for the clients. He relied on the following decisions : l Dr. P. Vadamalayan v. CIT [1960] 40 ITR 501 (Mad.). l CIT v. Dr. M.S. Shroff [1971] 80 ITR 687 (Delhi). l Addl. CIT v. Buckau Wolf New India Engg. Works Ltd. [1986] 157 ITR 751 (Bom.). l CIT v. S. Krishna Rao [1970] 76 ITR 664 (AP). l Delhi Clot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... round of technical knowledge. They are in a better position to appreciate the logal problems arising in technical fields. A CA who has acquired MBA degree is better equipped to appreciate managerial problems of his clients as to how the client manages his business, what problem is faced and how he solves them. Such a CA who has acquired MBA degree would be in a better position to guide the clients from the point of view of accountancy and law, how to manage the business. In business, it is now futile to consider accountancy totally divested from management. Both are so integrated that an expert having educational background of the two branches can appreciate how the management appreciate the solution of accounting problems and how the decis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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