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TMI Blog2014 (5) TMI 391X X X X Extracts X X X X X X X X Extracts X X X X ..... g M/s. Ricoh India Limited Versus The Dy. Commissioner of Income-tax [2013 (11) TMI 273 - ITAT MUMBAI] - except for internal documents, there is no material on record to indicate as to why so many parties refused to issue TDS certificates to the assessee after duly deducting the same - No reason worth the name has been stated as to why the assessee did not take any action as prescribed under the law against such erring parties – Decided against Assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... expenditure of Sri S. Goenka was claimed by the assessee-company and the same was thus disallowed. 5. In first appeal assessee besides reiterating the submission before AO placed reliance on the decisions in the case of Jalani Holding Pvt Ltd 42 TTJ 116 (Delhi) and Sakal Paper 114 ITR 256 (Bom). 6. Ld. CIT(A) however confirmed the action of AO by observing as under:- "5.3 I have carefully considered the facts of the case, the submissions of the appellant and the assessment order. It is an admitted fact that there is no policy of the company to sponsor higher studies of the employees/directors. Claim of improvement of business efficiency by Sh. S Goenka is contingent upon his completing the MBA abroad and possibly meaningfully contributi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this action of the AO by further holding that business purpose to these expenses is contingent, remote and in the realm of unforeseen and at least two steps away from present incurring of expenditure while assessee's consistent contention has been that assessee-company has claimed these expenses as per board's resolution of the company to sponsor foreign studies expenses of Sri Goenka, whole time director of the company and the same cannot be disallowed simply because Ms. G. Goenka is the son of managing director of the company and for making this submission reliance was placed on certain case laws. We further find that there is no dispute about the fact that these expenses were incurred as per the resolution of the company dated 24th July ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rding to which after studies Mr. Goenka will work for two years after his return from USA. There was no dispute about the fact that this agreement was also acted upon. On these undisputed facts ratio of Hon'ble Karnataka High Court in the case of Ras Information Technology Pvt. Ltd 12 taxman 58 is squarely applicable wherein One "A" was the managing director of the assessee-company. He was sent to USA for high studies. The assessee spent money towards his education and the said amount was claimed u/s. 37(1). The said deduction was disallowed by the AO which order was confirmed by first appellate authority. The Tribunal however allowed the assessee's claim and further appeal of the revenue was dismissed by the Hon'ble Karnataka High Court. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er appeal Hon'ble High court dismissed the assessee's appeal. We are surprised as to how Ld. DR has relied on this decision as issue in that case is totally different from the issue in this case. Similarly the other case laws relied by Ld. DR are also distinguishable on facts. 8. In view of above discussion, we are inclined to hold that expenses incurred by assessee-company on the foreign education of Sri Goenka whole time director of the company, be treated as business expenditure of the assessee. Therefore, addition made by AO and sustained by Ld. CIT(A) disallowing these expenses is hereby deleted. This ground of assessee's appeal is allowed. 9. Second ground relates to addition of Rs. 58,386/- being TDS written off by the assessee. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t could not be recovered and hence, same was to be allowed as business loss - Whether once assessee received net amount from parties and amount of TDS was deposited in Government exchequer, nothing remained due from parties and, resultantly, there could be no question of incurring any business loss or treating amount of TDS not recovered as short receipts - Held, yes - Whether further, since this amount represented tax deducted at source by parties on behalf of assessee, same was in nature of TDS receivable - Held, yes - Whether, consequently deduction claimed by assessee could not be accepted - Held, yes [Para 13] [In favour of revenue]" In view of the above, order passed by Ld. CIT(A) is hereby upheld and this ground of assessee is dismi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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