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TMI Blog2014 (1) TMI 1140X X X X Extracts X X X X X X X X Extracts X X X X ..... lding the Assessing Officer order of disallowing Education Expenses of Rs. 29,05,488/- on the facts." 3. Two Directors of the assessee company completed MBA course abroad. Their expenses have been charged to the profit and loss account. The assessee claimed that the MBA degree has helped the Directors in improving the business profile of the assessee and therefore, the expenditure incurred for acquiring higher professional degree is an allowable business expenditure. The A.O denied the claim of the assessee on the ground that these two Directors are sons of the promoter directors of the assessee company and have been admitted as directors for the sole purpose of debiting their education expenditure to the profit and loss account of the com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Sakal Paper Pvt. Ltd. Vs CIT 114 ITR 256 and submitted that the Hon'ble Jurisdiction High Court has held that the husband and wife as shareholders and directors of the company running Marathi Paper incurred expenditure for obtaining practical training of their daughter who was working in the editorial department of the company was held to be revenue expenses. He has also relied upon the following decision: CIT Vs Dr. M. S. Shroff 80 ITR 687 (Del) M/s J. B. Advani & Company Pvt. Ltd. 92 TTJ 175 Apurva Patel 7 SOT 755 5. The Ld. A.R has further pointed out that for the assessment year 2006-07 and 2007-08 the assessee has paid Fringe Benefit Tax (FBT) on these expenses which have been accepted by the A.O after verification. Therefore, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment of value and chargeability of Fringe Benefit Tax as mentioned in the assessment order u/s 115 WE: "After verification, the value of Fringe Benefit chargeable to tax is accepted at Rs. 12,91,235/-." Thus, it is clear that the Fringe Benefit Tax paid by the assessee has been duly examined by the A.O and then accepted. Once the A.O has accepted the FBT paid by the assessee then such expenditure cannot be disallowed. The Co-ordinate Bench of this Tribunal in case of Hansraj Mathuradas Vs ITO (supra) has considered an identical issue in para 17 as under: "17. We have heard the arguments of both the sides and also perused the relevant material on record. The learned counsel for the assessee has taken us through the CBDT Circular No. 8/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the learned counsel for the assessee, circular No. 8/2005 dated 29-08-2005 issued by the Board explaining the provisions relating to fringe benefit tax thus makes it clear that fringe benefit tax is levied on the expenses incurred by the employer irrespective of whether the same are incurred for official or personal purposes. In our opinion, once fringe benefit tax is levied on such expenses as has been done in the present case, it follows that the same are treated as fringe benefits provided by the assessee as employer to its employees and the same have to be appropriately allowed as expenses incurred wholly and exclusively incurred by the assessee for the purpose of its business. In that view of the matter, we delete the disallowance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... found by the Tribunal, which have been indicated and summarized above, is appears to us that the reason given by the Tribunal for the disallowance in the facts and circumstances of this case and particularly bearing in mind the close relationship of the two directors and the trainee is clearly unsustainable; and if that be the only reason which has weighed with the Tribunal, we must answer the question referred to us in favour of the assessee since the view we have taken is that the reason given by the Tribunal is not a good reason." 9. The above decision of the Hon'ble Jurisdiction High Court is applicable in the facts of the case in hand. Accordingly, in the facts and circumstances of the case and in view of the above discussion we delet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on record. Personal element in such expenses cannot be ruled out. In my opinion, disallowance @ 20% is quite justifiable. This ground also deserves to be rejected." 13. It is clear from the findings of the authorities below that no specific averment or incident has been brought on record to indicate that the vehicle has been used other then the business purposes. Even otherwise in the case of company if it is found that the vehicle has been used for personal purpose then it can be considered as perquisites in the hands of the user employee. Accordingly, in the facts and circumstances of the case we do not find any justification on ad-hoc disallowance of 20% on this account. Hence the same is deleted. For the assessment year 2006-07 14. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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