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| The Tax Publishers2020 TaxPub(DT) 1952 (Mum-Trib) INCOME TAX ACT, 1961
Section 37(1)
Mr. J non-executive director completed higher education with financial assistance of assessee company and assessee had incurred education expenditure for the last year of graduation and Mr. J was working in the company as non-executive director at the time of availing of above benefit. The company decided to approve above said expenditure by passing a resolution in this regard and entered into education sponsorship agreement. As per the above agreement J had to work with assessee company for a period of 3 years in return for the sponsorship and he joined the company immediately after graduation and was still serving in the company. Accordingly, expenditure on training of Non Executive Director was deductible.
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Business expenditure - Training expenses incurred in respect of Non Executive Director - Business purpose -
Assessee-company claimed deduction of training expenses were incurred in respect of Mr. J, Non Executive Director. AO held the expenditure as not for business purpose of assesse and accordingly disallowed deduction. Held: Mr. J, Non Executive Director completed higher education with financial assistance of assessee company and assessee had incurred education expenditure for the last year of graduation and Mr. J was working in the company as non-executive director at the time of availing of above benefit. The company decided to approve above said expenditure by passing a resolution in this regard and entered into education sponsorship agreement. As per the above agreement J had to work with assessee company for a period of 3 years in return for the sponsorship and he joined the company immediately after graduation and was still serving in the company. Accordingly, training expenditure in question was allowable as deductible.
REFERRED :
FAVOUR : in assessee's favour
A.Y. :
IN THE ITAT, MUMBAI BENCH
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