In the absence of written agreement to join back the firm, the expenditure incurred on higher education abroad of grandson of firm’s partners working there as an apprentice cannot be claimed as business expenditure.
Pushpsons International Vs ACIT (ITAT Delhi) – The agreement to serve has not been placed on record and its terms have not been paraphrased in any submission. Further, it has not been shown that the understanding, if any, came to an end only when he became a partner and not when he left India. Factually, no service has been rendered to the assessee in the period of absence for education. Therefore, it is held that the dis allowance of Rs. 36,000/- was rightly made.
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH ‘F’ DELHI
I.T.A. No. 417(Del)/2007 – Assessment year: 2003- 04
Pushpsons International
Vs.
Assistant Commissioner of Income-tax
ORDER
PER K.G. BANSAL : AM
The assessee has taken two effective grounds, bearing nos. 2 and 4, that on the facts and in the circumstances of the case and in law, the ld. CIT(Appeals) erred in confirming the dis allowance of –(i) Rs. 12,30,799/- out of staff training, welfare and traveling expenses; and (ii) Rs. 36,000/- out of salary. Ground no. 3 is in aid of ground no. 2, in which the finding of the ld. CIT(Appeals) that the business of the assessee does not require high quality technical inputs, advance technology or globally competitive skills has been assailed.
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