2014 (7) TMI 1084 - HC - Income Tax

Claim of deduction on expenses incurred for education of daughter Daughter joined assessee s firm and went abroad for higher education - Held that - Assessee has not been able to bring on record anything and particularly the scheme so as to provide higher education abroad to the employees or associates CIT(A) has observed that in the firm of the assessee, there were at least 14 associate advocates and none were given an opportunity to go abroad prior for higher education - not only she was allowed to continue and stay abroad, but permitted to join any firm after completing the higher education - Thus, this was not the decision taken in the interest of the activities and profession of the firm of Advocates but for furthering the career prospects of the child/ daughter - neither of the Authorities committed any error or perversity in disallowing the deduction both the judgments relied by the assessee could not be taken into consideration as they operate in different facts and circumstances Thus, no substantial question of law arises for consideration Decided against Assessee.

Summary

Issues:
1. Challenge to concurrent orders of the Income Tax Appellate Tribunal and Commissioner of Income Tax (Appeals).
2. Claim of deduction for education expenses of the daughter of the appellant, who is an Advocate.
3. Interpretation of the judgment in the case of Sakal Papers (P.) Ltd. regarding deduction for education expenses.
4. Comparison with the judgment in the case of J.B. Advani & Co. Ltd. on deduction for foreign education expenses.

Analysis:

Issue 1:
The appellant contested the orders of the Income Tax Appellate Tribunal and Commissioner of Income Tax (Appeals) regarding the deduction claimed for education expenses of his daughter, who joined his firm as an Advocate.

Issue 2:
The appellant argued that the education expenses for his daughter, sent abroad for higher education, should be deductible as business expenditure since she joined the firm and gave an undertaking to work for a minimum period after completing her education.

Issue 3:
The court examined the judgment in Sakal Papers (P.) Ltd. case, where a deduction for education expenses was allowed due to specific circumstances, including the daughter's work for the company after returning from abroad. However, in the present case, the court found that the daughter's education abroad was not primarily for the benefit of the firm but for her career prospects, leading to the disallowance of the deduction.

Issue 4:
Regarding the comparison with the J.B. Advani & Co. Ltd. case, the court noted that the deduction for foreign education expenses was allowed due to the daughter's return to work for the company and her appointment as a director. However, in the present case, the daughter was not bound to return or work for the firm after completing her education, leading to the disallowance of the deduction.

In conclusion, the court dismissed the appeal, stating that it did not raise any substantial question of law. The judgment emphasized the importance of specific circumstances, such as the purpose of education expenses and the commitment of the individual to work for the firm, in determining the deductibility of such expenses for tax purposes.