Case Law Details
Shri Harshvardhan Johari Vs DCIT (ITAT Jaipur)
Conclusion: Assessee-sole proprietor was not eligible for a tax deduction for his own education expenses as the same could not be treated as business expenses and the point in time when the expenditure was incurred, the business of the assessee was not set up.
Held: The question for consideration was where assessee, an individual, who was engaged in the business of trading in bullion and base metal through his sole proprietorship concern, incurred expenditure on his own education whereby he pursued graduate i.e, B.SC (Hons) course in management during the period 2006-09 and post graduate course i.e, M.Sc during 2010-11, whether such expenditure could be allowed as expenditure incurred wholly and exclusively for the purposes of his business for the impugned assessment year 2010-11 or the same was in nature of personal expenditure, which was not allowable while computing taxable business income from such sole proprietorship concern, in terms of provisions of section 37. It was held that assessee was an individual and for pursuing the graduation course, he had spent the money which was more like laying the foundation for his own future career and was thus clearly in the realm of personal expenditure rather than expenditure in the realm of business expenditure where the business had not been set-up and thus, the question of allowability of the same under section 37 didn’t arise for consideration. What was therefore relevant was not just the ultimate benefit or utilization of such expenditure for business purposes but what was equally relevant was that the point in time when the expenditure was incurred, the business of the assessee should have been set up which however, was not the case in the instant case.
FULL TEXT OF THE ITAT JUDGEMENT
This is an appeal filed by the assessee against the order of ld. CIT(A)-4, Jaipur dated 26.05.2017 for Assessment Year 2010-11 wherein the assessee has taken the following grounds of appeal:-
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