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TMI Blog2017 (3) TMI 570X X X X Extracts X X X X X X X X Extracts X X X X ..... travelling expenses on account of expenses incurred by the assessee for higher studies of a staff of the company. 3. Aggrieved from the order of ld. Assessing Officer, the assessee filed an appeal before the ld. CIT(A), who has also confirmed the additions made by the AO, by observing the followings :- 5. I have considered the submission of the appellant and perused the assessment order. During the course of appellate proceedings, the Ld. A.R. of the appellant company was asked to submit the details/explanation with regard to exact relationship between Ms. Megha Goyal and one of the Directors of the appellant company, copy of appointment letter of Ms. Megha Goyal, her educational qualification at the time of her appointment, her designation in the company's job, for which course she went to UK, duration of course and up to which period did she work in the company after competing her course. The aforesaid details were submitted by the appellant's A.R. On examination of details, it is observed that Ms. Megha Goyal is the daughter of brother of Shri Ramesh Goyal, one of the Directors of the appellant company i.e. she is the niece of the director. It is observed that Ms. Meg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so that after her return, the company may reap the benefits of her expertise and knowledge to promote the business of the appellant company. However, I am of the opinion that this argument is only on paper. In actual what benefits were derived by the appellant company from her higher education knowledge is not known even to the appellant company itself. Otherwise, the appellant could have substantiated its case strongly both before the AO as well in appellate proceedings. However, the appellant did not produce a single submission or data or evidence in support of its claim about the purpose for which sponsorship was granted for higher education of Ms. Goyal. As mentioned above, as per the bond, Ms. Megha Goyal was to work for the period of 3 years after returning from UK. The same bond says that if Ms. Goyal leaving the company before the expiry of the Bond period at her own will, the company will recover the total expenses incurred on her along with interest @ 18% per annum from her. As per the submission made by the appellant's A.R. in the course of appellate proceedings, it an admitted fact that for whatever reason but Ms. Megha Goyal left the company on her own before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... came the director of the company. The claim of the assessee was disallowed by the AO but allowed by the Tribunal. On further appeal to the High Court, the Hon'ble Madras High Court has held as under: "If the assessee's logic were to be accepted, in every family owned business, all the expenditure incurred in bringing up the children who may later on be given a role in business as partners or directors could be claimed as business expenditure incurred in training the prospective employees and directors of the business. The expenditure permissible for deduction is expenditure that is wholly and exclusively laid out for the purposes of business. The expenditure which a father incurs out of his natural love and affection for his children in meeting the cost of their education cannot become business expenditure merely because he is also the owner or a director of a business in which the son or daughter subsequently takes part. It is not the case of the assessee that the assessee had a scheme of sending people abroad for training with stipulation that after receiving the benefit of training they should work for the company and that moneys expended on such training were in fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t on the facts & circumstances of the case, appellant may alter, add & delete any of the grounds of appeal on or before the hearing of the appeal. 4.1 The ld. AR for the assessee has submitted that Miss Megha Goyal has joined the company from 1st October 2008 at the remuneration of Rs. 30,000/- per month for the post of Public Relation Officer (PRO). She had been looking after overall HR supervision of the company`s Machining Division and also observed the day to day affairs of the company`s vendor. In the month of July 2010, she approached the company to sponsor for her higher study in UK at the Nottingham University for MBA in the Management stream. On her request, the company has agreed to sponsor her higher study. In this context, she has executed a Bond that after completion of her study, she will again join the company for a minimum period of three years at a remuneration of Rs. 1,35,000/- per annum. Her course was for 12 months only which was ended in September 2010. In the month of October 2010 she again joined the company at a remuneration of Rs. 1,35,000/- per annum and she has drawn the same as her first year remuneration from the company. She has left the company in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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