2010 (4) TMI 1038 - HC - Income Tax

Summary

Issues involved: Appeal against disallowance of training expenses by the Assessing Officer for assessment year 1998-99.

Training Expenses Disallowance Issue:
The Assessing Officer disallowed 4/5th of the training expenses claimed by the appellant, amounting to Rs. 20,96,127, stating that the benefit of these expenses was spread over five years. However, the Commissioner of Income Tax (Appeals) deleted the disallowance, and the Income Tax Appellate Tribunal upheld this decision. The Tribunal noted that since the Assessing Officer had accepted that the expenditure was revenue expenditure and the assessee followed the mercantile system of accounting, there was no justification for not allowing the entire expenditure in the relevant year. The High Court found no reason to interfere with the Tribunal's findings, as no perversity was identified, and no substantial question of law arose for consideration. Consequently, the appeal against the disallowance of training expenses was dismissed.

Conclusion:
The High Court upheld the decision of the Income Tax Appellate Tribunal to allow the entire training expenses claimed by the appellant for the assessment year 1998-99, dismissing the appeal filed by the Revenue against the disallowance made by the Assessing Officer.