TMI Blog2022 (11) TMI 445X X X X Extracts X X X X X X X X Extracts X X X X ..... s that education expenses were not incurred with the intention of furthering the business of the assessee but out of moral obligation as a father and the purpose of contracting her services for five years was strangely enough only to receive back what was paid for her education in terms of services rendered by her at lesser than normal rates. The contract is just an after-thought which not even binds the daughter for a reasonable period to contribute substantially to the assesses practice. Whether the assessee had ever incurred such expenditure on the education of any other employee in this firm, either in the past or in the future, has not been brought to our notice, so as to give weightage to the contention that such education expenses were incurred primarily with the intention of promoting its business or profession. As merely because these expenses were in relation to the daughter of the assessee that they were incurred by the assessee, and not dominantly because they were for the purpose of business of the assessee firm. Even if the daughter of the assessee was pursuing any other course, the father was morally bound to spend on the education of his daughter. Therefore, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .Snehal Mahendra Kumar Shah, is an architect and interior designer and the educational expenses of his daughter incurred by him, amounting to Rs.23,52,809/-, were in relation to advanced studies in the field of architecture from Association School of Architecture, London, U.K , his daughter, Ms.Sunaina Shah, having cleared her Bachelors degree in architecture from CEPT University in the year 2015. 5. The contentions of the ld.counsel for the assessee before us was that the said expenses had been incurred wholly and exclusively for the purpose of the business of the assessee, and had not been incurred for the reason that Ms.Sunaina Shah was the daughter of the assessee. In this regard, he emphasised the fact that the assessee s daughter was a highly qualified architect working in the assessee s firm and wanted to pursue higher education; that she had studied in various prominent institutions , interned with globally acclaimed architects and had a huge repertoire of knowledge and expertise. That she had agreed to work with the assessee for five years after completing her education. It was pointed out that her knowledge gained in the process had substantially contributed to the bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Holds certificate of Registration from Council of Architecture in India for the period June 2015 to December 2016. Copy of the said registration is attached herewBn as Annexure-2D (page-31). The Council of Architecture (COA) has been constituted by the Government of India under the provisions of the Architects Act, 1972, enacted by the Parliament of India. The Act provides for registration of Architects, standards of education, recognized qualifications and standards of practice to be complied with by the practicing architects.: 6. Further our attention was drawn to para-4.5 of the impugned order reproducing submissions of the assessee to the effect that she had worked/interned with world-class architects, adding to her credentials: 4.5. Prior to joining the firm and after obtaining the above degrees, Ms. Sunaina has worked as intern / employee of the world class Architectural firms which add to her credentials. Internship with Architects Tod Williams Billie Tsien in New York during the period 02.05.2011 to 28.10.2011 for 27 weeks. The firm - Tod Williams Billie Tsien started during 1977, focuses on work for institutions: museums, schools, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der as under: 4.13. With such advanced education, she was sent outside the country for acquiring higher qualification, which would improve the services, qualitative standards, global outlook for design and structures while serving the clients. Merely because she happens to be the daughter of the owner of the business, it cannot be said that the money is just spent by her parents out of love and affection for higher education of their daughter. She was an employee of the assessee, in the field, in which, she has acquired degree and in fact, she continued with the firm at a minimum remuneration as compared to contemporaries even after obtaining and holding two masters, one bachelor degrees and hands on experience with internationally recognised and famous professional organisations and projects. Thus, after acquiring the additional knowledge, she has come back and she is working with the assessee. Therefore, there is a direct nexus between the expenses incurred towards her education with the business, which the assessee is carrying on. 9. The ld.counsel for the assessee further referred to various decision of Hon ble High Courts holding the expenses incurred on the educat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relied on the ratio of following case laws: i) Karnataka High Court in case of Mallige Medical Centre (P) Ltd. vs. JCIT ii) High Court of Karnataka in case of CIT Vs. RAS Information Technologies (P) Ltd. (2011) 238 CTR 0076 Hi) High Court of Bombay in case of Sakal Papers Pvt. Ltd. vs. CIT (1978) 1978 CTR 0318 (Bom) iv) Calcutta High Court in the case of Hindustan Aluminium Corporation Ltd vs CIT (159ITR673) v) Madhya Pradesh High Court in the case of CIT vs Kohinoor Paper Products (226 ITR220) vi) Madhya Pradesh High Court in CITvs Naidunia News Networking (P) Ltd. (210 Taxmann 73) The appellant has tried his best to create evidence so as to claim the expenditure on daughter's education. The argument is not accepted for following reasons: a) This is an appropriation of income and not expenditure to earn income for A.Y. 2015-16. The appellant is free to use his income after paying the taxes on it, may it be on education of children or visit abroad for sight-seeing. b) Without admitting, even if it is spent for progress of appellant, it is resulting into^ postponement of tax liability so far impugned A.Y. is concerned and the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot to be lost sight of is the very pertinent fact of the relationship between the assessee and Ms.Sunaina Shah that of father and daughter (parent-daughter). In Indian society, it is the pious and moral obligation of parents to maintain their children till they are independent. Also a very important feature of the Indian society is family run businesses/profession, where from generation to generation the family carries on the same profession or business. Therefore, a doctor s children preferably become doctors and so on in other professions and businesses also. It is a very prominent feature in our society where majority of the business/professions are all family run and this legacy is handed down from one generation to another. Primary purpose, therefore, for incurring expenditure on the education of the children in the family is therefore to maintain and ensure business to remain in the family itself, from generation to generation and thus ensuring the fruits of hard work of the previous generations to remain and be enjoyed by the family itself. 16. Considered in this back-drop, the expenditure incurred by the assessee on the daughter s education in the present case before u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... future, has not been brought to our notice, so as to give weightage to the contention that such education expenses were incurred primarily with the intention of promoting its business or profession. 19. It was merely because these expenses were in relation to the daughter of the assessee that they were incurred by the assessee, and not dominantly because they were for the purpose of business of the assessee firm. Even if the daughter of the assessee was pursuing any other course, the father was morally bound to spend on the education of his daughter. Therefore, the fact that the daughter pursued the very same profession in which the father was , was not a material fact for incurring the expenditure. As also stated above by us, that the business of the assessee remained in the family alone, was also a major contributing factor for the father to incur this expenditure. Therefore, the primary and dominant purpose for incurring this expenditure was personal consideration and not professional consideration. With the logic advanced by the Ld.Counsel for the assessee, every professional firm or business, incurring educational expenses for their progeny/ children would all claim the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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