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TMI Blog2010 (7) TMI 670X X X X Extracts X X X X X X X X Extracts X X X X ..... nly shows that the assessee had taken precaution to see that the interest of the assessee was protected by imposing such a condition on the student - Even otherwise, when the assessee is running an Engineering and Consulting Services, earning profits and in pursuance of its business or profession, it laid out certain monies for education of a student in the very same field, such an expenditure cannot be held to be unlawful or prohibited by law - Having regard to the quantum of amount spent it cannot also be said that it is a devise to avoid payment of tax or to reduce the tax by such a device of sponsoring a student's studies abroad - Decided in favour of assessee. - IT APPEAL NOS. 2867 AND 2868 OF 2005 - - - Dated:- 21-7-2010 - N. KUMA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... despite the fact that Sri Arun Srinivasan was not employed by the assessee company nor did he come and join the assessee company after his studies? (ii) Whether the Tribunal was correct, in holding that the entire expenditure incurred for the studies of Sri Arun Srinivasan, the son of the Managing Director of the assessee company should be allowed as an expenditure, despite the fact that agreement entered into between him and the assessee company was a colourable device as the clause in the agreement gave an option to Sri Arun Srinivasan that if he had no interest in joining the company, he had to return the entire amount, which clearly showed that the said payment made cannot be treated as the expenditure during the current assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purposes of the business or profession shall be allowed in computing the income chargeable under the head "Profits and gains of business or profession". Explanation : For the removal of doubts, it is hereby declared that any expenditure incurred by an assessee for any purpose which is an offence or which is prohibited by law shall not be deemed to have been incurred for the purpose of business or profession and no deduction or allowance shall be made in respect of such expenditure." If the expenditure incurred by the assessee is for any purpose, which is an offence or which is prohibited by law it is not entitled to the benefit of deduction. Similarly, expenditure incurred by an assessee on advertisement in any souvenir, brochure, tract ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... protected by imposing such a condition on the student. Even otherwise, when the assessee is running an Engineering and Consulting Services, earning profits and. in pursuance of its business or profession, it laid out certain monies for education of a student in the very same field, such an expenditure cannot be held to be unlawful or prohibited by law. Having regard to the quantum of amount spent it cannot also be said that it is a devise to avoid payment of tax or to reduce the tax by such a device of sponsoring a student's studies abroad. In the facts and circumstances of the case, keeping in mind the amount extended towards the educational expenses and the nature of the education and also other attending circumstances, we are satisfied t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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