9911796707
TMI Blog2022 (1) TMI 276X X X X Extracts X X X X X X X X Extracts X X X X ..... 0/-. Aggrieved by the order of AO, assessee carried the matter before CIT(A) who vide order dated 27.09.2018 in Appeal No.10174/2017-18 dismissed the appeal of the assessee. Aggrieved by the order of CIT(A), assessee is now in appeal and has raised the following grounds: "1. That on facts and circumstances of the case and in law, the Commissioner of Income Tax (Appeals) ['CIT(A)'] erred in confirming the action of the Assessing Officer ('AO') in disallowing a sum of Rs. 99,84,863/- and adding back the same to the income of the Appellant by treating expense incurred under the head "Scholarship Expenses" as having not been incurred wholly and exclusively for the purpose of the profession of the Appellant. 2. That the CIT(A) and the AO grossly erred in disallowing the aforesaid amount of Rs. 99,84,863/-, incurred on account of scholarship granted to further the professional interest of the Appellant, terming the same as gift and disallowing it under section 37 of the Income Tax Act, 1961 ('Act'). 3. That on the facts and circumstances of the case & in law, the CIT(A) and the AO erred in not appreciating that the expenditure incurred was to support the Appellant in establishing t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and the scholarship given to individuals who were in no way related to the profession of the assessee could not be said to have been expended for training/skill development of the employee of the assessee. It was thus held that the amount given in the form of Scholarship and claimed as a business expense was not incurred "Wholly and exclusively" for the purpose of business or profession. AO thereafter noted that facts for A.Y. 2014-15 were similar to the facts of the earlier years. He therefore, following the decision of his predecessor, disallowed the claim of expense amounting to Rs. 99,84,863/- and made its addition. 6. Aggrieved by the order of AO, assessee carried the matter before CIT(A). CIT (A) dismissed the ground of assessee and upheld the order of AO by inter alia noting that the facts of the case were identical to assessee's own case for A.Y. 2011-12 to 2014-15 wherein his predecessor had confirmed the addition made by AO. He accordingly upheld the order of AO. 7. Aggrieved by the order of CIT(A), assessee is now in appeal before us. 8. Before us, at the outset, Learned AR submitted that identical issue arose in assessee's own case in A.Y. 2011-12, 2013-14 & 2014-1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in accordance with nature and scale of the business/ profession of the assessee. It may be a case that in case of one assessee, particular expenditure is " wholly and exclusively" incurred for the purposes of business and in another case it may not be so. Undoubtedly, assessee is a noted international lawyer who has set up a scholarship for creating his visibility in international arena and his social standing. The assessee has specifically submitted that it has increased lot of value of the CV of the assessee and the government of Singapore has appointed him on certain committees of repute. Even otherwise, it is not open to the revenue to adopt a subjective standard of reasonable as and decide whether the type of the expenditure of the assessee should incur and in what circumstances. The opinion of the learned assessing officer that attending the conferences et cetera would have added more weightage to the professional profile of the assessee is devoid of any merit. It is not the AO but the assessee is carrying on the profession. He knows better that what kind of expenditure he should incur for furtherance of his business. To judge allowability of an expenditure, the learned asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xpenditure incurred by the assessee for promoting his professional profile. These expenditure cannot be held to be capital expenditure in nature as no fresh new fixed assets is created by paying the scholarship sum. Further merely because in the agreement it is mentioned as an annual gift in the form of scholarship, it does not become a gift. In fact, it is the expenditure incurred by the assessee in furtherance of his business. While issue arose before coordinate bench in case of another professional firm in ITA number 1382/Del/2012 for assessment year 2009 - 10 wherein substantial contribution was made for a building of an association which promotes the study of taxation. The coordinate bench held that such expenditure incurred by the assessee is wholly and exclusively incurred by the assessee for the purpose of its profession. Revenue carried the matter before the honourable Delhi High Court, which upheld the order of the ITAT in ITA number 50/2014 dated 11/8/2015. The facts of the present case are on the far better footing. Hence, we reverse the order of the lower authorities, and direct the learned assessing officer to delete the above disallowance. In view of this, we allow g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... grant the credit for the TDS after necessary verification and in accordance with law. Thus ground of assessee is allowed for statistical purposes. 16. Ground No. 5 is with respect to not allowing relief of Rs. 8,57,07,736/- u/s 90 of the Act for the taxes paid in the United Kingdom (UK). 17. Assessee had claimed relief of Rs. 8,57,07,736/- u/s 90 of the Act which represented proportionate tax credit in respect of tax of Rs. 11,71,22,901/- paid by the assessee in United Kingdom, the corresponding income which was already offered to tax by assessee. The AO did not grant credit for taxes paid in UK. When the matter was carried before CIT(A), CIT(A) did not adjudicate the issue as the rectification application filed by the assessee before the AO was pending. 18. Aggrieved by the order of CIT(A), assessee is now before us. 19. Before us, Learned AR submitted that during the year under consideration, assessee had earned overseas income of Rs. 25,30,32,449/- in United Kingdom on which it had paid tax of Rs. 11,69,22,726.6 (corresponding US GBP 12,64,588.63) and apart from that, assessee had also suffered withholding tax to the extent of Rs. 2,00,174.8 (corresponding US GBP 2,165.01). ..... X X X X Extracts X X X X X X X X Extracts X X X X
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