9911796707
TMI Blog2014 (1) TMI 546X X X X Extracts X X X X X X X X Extracts X X X X ..... s14A of the Act. (c) Disallowance of medical expenses incurred for staff. 3. The facts relating to the issues are stated in brief. The assessee is engaged in the business of dealing in shares/securities and it also working as the franchisee of "Ma Foi Management & HR Consultants". To become the franchisee of the above said company, the assessee paid a sum of Rs.6,61,200/- on 1.9.2005, which was valid for a period of 24 months. The assessee claimed the said amount in proportion to the period in the years relevant to the assessment years 2006-07, 2007-08 and 2008-09. The assessee had debited the franchisee fee under the head "Preliminary expenses". The AO disallowed the same with the general observation that there were insufficient details/i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bserved that this expenditure does fall in the category of preliminary expenses as defined in sec. 35D of the Act. There should not be any dispute that the description given by the assessee as "Preliminary expenses" is not decisive or conclusive. The nature of the expenditure should be determined objectively. On a perusal of the agreement entered by the assessee with M/s Ma Foi Management Consultants Ltd, we notice that the assessee has only acquired the license to act as the franchisee of the above said company. Thus, it is not a case of acquiring a trade name, which would fall in the category of Capital expenditure. Accordingly, in our view, the same is allowable as expenditure u/s 37(1) of the Act as it satisfies all the condition prescr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hence, we are unable to agree with the view expressed by Ld CIT(A) on this issue. Though the assessee has claimed that the medical expenses were incurred on its employees, yet the record show that the assessing officer did not examine the said claim of the assessee. As stated earlier, the AO had disallowed this expenditure for want of adequate details/explanations. Under these circumstances, in our view, this issue needs fresh examination at the end of the AO. Accordingly, the order of the Ld CIT(A) on this issue is set aside and the matter is restored to the file of the AO with the direction to examine this issue afresh in the light of explanation of the assessee. The assessee is also directed to furnish relevant vouchers to prove its cla ..... X X X X Extracts X X X X X X X X Extracts X X X X
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