Case Law Details
DCIT Vs Toshvin Analytical Private Limited (ITAT Mumbai)
Conclusion: Expenditure incurred by assessee on education of director was incurred in furtherance of assessee’s business interest and hence, allowable.
Held: Education expenses had been incurred in relation to knowledge enhancement of the key personnel of assessee-company and the director was liable to refund the said expenditure in case of breach of various terms of agreement. The expenditure was duly authorized by Board of Directors of the assessee company. The offer letters of the concerned universities offering the aforesaid course to the director had also been placed on record. Thus, it was concluded that the expenditure as incurred by assessee on education of director fulfilled the conditions of Section 37(1) and was incurred in furtherance of assessee’s business interest and hence, allowable.
FULL TEXT OF THE ITAT JUDGMENT
1. These are cross appeals for Assessment Year [AY] 2011-12 which contest the order of Ld. Commissioner of Income Tax (Appeals)-3, Mumbai, [CIT(A)], Appeal No.CIT(A)-3/IT-98/DCIT-1(3)/14-15 dated 29/3/2017. The assessee is aggrieved by confirmation of estimated disallowance on account of alleged bogus purchases & disallowance of certain foreign education expenses whereas the revenue is aggrieved by grant of relief on account of alleged bogus purchases. The assessment for impugned AY was framed by Ld. Deputy Commissioner of Income Tax-1(3), Mumbai [AO] u/s 143(3) on 20/03/2104 wherein the income of the assessee was assessed at Rs.12.59 Crores after certain additions as against returned income of Rs.11.81 Crores e-filed by the assessee on 30/09/2011. During impugned AY, the assessee being resident corporate entity was engaged as commission agent & in the business of marketing, installation & servicing of analytical hi-tech equipments. The following quantum additions are the subject matter of present appeal before us:-
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