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Expenditure on education of director is personal expenses and not allowable
Case Law Details
- Case Name
- Shreenath Motors Pvt. Ltd Vs CIT (Bombay High Court)
- Appeal Number
- Only available for paid members
- Date of Judgement/Order
- Only available for paid members
- Courts
- All High Courts, Bombay High Court
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Cousel fo the Assessee submits that , the ITAT had erred in confirming the disallowance of expenditure on remuneration and training of a working Director of the Appellant-Assessee that was incurred legitimately for the efficient management and conduct of the Appellant-Assessee’s business. He submitted that the expenditure was not only legitimate but had a direct nexus with the business of the Appellant-Assessee and was therefore allowable as a deduction under section 37 of the Income Tax Act, 1961. It is in this light that the learned counsel has questioned the correctness of the impugned or...
Points for consideration:-
-The expenditure incurred in the interest of business.
-The expenditure not in personal nature.
-Decision taken for meet out education expenses should be taken by the management through under taking.
-Business of the company and feild of education should be the same.
-Higher education in the related field would prove beneficial for the company
-Principle laid down in these judgments also should be considered: Jhalani Holding Pvt. Ltd. Vs ITO 42 TTJ 116 (Delhi), Karnataka High Court in Mac Explotec (P) Ltd v CIT (2006) 155 Taxman 247), Bombay High Court considered this point in Sakal Papers (P) Ltd v CIT (114 ITR 256), Madhya Pradesh High Court in CIT v Kohinoor Paper Products (226 ITR 220)