TMI Blog2003 (8) TMI 155X X X X Extracts X X X X X X X X Extracts X X X X ..... s and in the circumstances of the case and in law the learned CIT(A) ought to have upheld the order of the AO. 3 It is, therefore, prayed that the order of the CIT(A) be set aside and that of the AO be restored." 2. I have heard the learned Departmental Representative as well as the counsel for the assessee. 3. The learned Departmental Representative admitted that the assessee was carrying on legal profession in various law including international laws and also the fact that Shri Adarsh Hathi was the partner of the assessee's firm styled as M/s P.C. Hathi, and has objected to the order of the CIT(A) whereby he has allowed expenses incurred by the firm towards education i.e., for procuring degree in business management law in USA, by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expenditure and in support of this submission relied on the decision in case of M/s Sakal Papers (P) Ltd. vs. CIT 1978 CTR (Bom) 318 : (1978) 114 ITR 256 (Bom). With respect to learned Departmental Representative's objection that the expenditure will not be allowable under s. 40(b) of the Act, the counsel for the assessee, after relying on the decision of the Hon'ble High Court of Gujarat in the case of CIT vs. Natwarlal Tribhovandas (1973) 87 ITR 703 (Guj) where the Hon'ble High Court has considered the meaning of "actively engaged in the conduct of business" has held that the knowledge gained by the partner during the stay abroad would ultimately benefit the firm and help it in carrying on its business more efficiently and also to expand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 986-87 in ITA No. 1074/Ahd/1992 dt. 15th May, 1997, wherein the expenses incurred by the assessee on the education of his son who had gone abroad were allowed as business expenses. 4. I have considered the rival submissions, the facts and circumstances of the case and the various decisions relied upon by the parties. 5. So far as the decision of the Hon'ble High Court of Bombay in the case of CIT vs. Hindustan Hosiery Industries is concerned, I am of the opinion that the same is not of any help to the Revenue because in that case there was a specific finding that the education procured by the partner going abroad had no nexus with the nature of business of the assessee but in the present case there is direct nexus between the type of ed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in India as a partner of the firm. There, therefore, appears to be a nexus between the expenditure and the knowledge attained by the partner. In the case of CIT vs. Dr. M.S. Shroff (1971) 80 ITR 687 (Del) who was a surgeon, the Delhi High Court held that the tour expenses of foreign countries to visit hospitals to keep abreast of latest technique was an expenditure which was an allowable one. In my view, considering these two decisions there is a direct nexus between the incurring of expenses for acquisition of knowledge by the partner Shri Adorsh Hathi for the business of the firm. Therefore, the expenditure is an allowable expenditure and has to be allowed as a deduction from the total income. The AO is directed to allow the same." 7. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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