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TMI Blog2006 (12) TMI 73X X X X Extracts X X X X X X X X Extracts X X X X ..... aw: "1. Whether on facts and in the circumstances of the case, the Income-tax Appellate Tribunal is right in law in rejecting the appellant's claim for sponsorship expenditure? 2. Whether on facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in not noting the various distinguishing factors between CIT Vs. R.K.K.R. Steels Ltd. and the instant case. 2. The brief facts leading to the above questions of law are as under : 3. The assessee is a Private Limited Company engaged in the manufacture of silicon and other chemicals. The relevant assessment year is 1998-99 and the corresponding accounting year ended on March 31, 1998. The assessee filed Return of income on 30.04.1998 declaring ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i. Vedanth Jhaver by which, the assessee company sent Shri. Vedanth Jhaver for higher studies to U.S.A. As per the agreement, the assessee company has to pay the entire cost of his studies, on condition that the said Shri. Vedanth Jhaver should come back and serve the company for a minimum period of ten years. In pursuance of the above, Shri Vedant Jhaver was sent abroad and hence, the amount is incurred for the purpose of the business. The learned counsel further submitted that the Tribunal is wrong in dismissing the appeal by following a decision of this Court reported in [2002] 258 ITR 306 in the case of CIT v. R.K.K.R. Steels P. Ltd., wherein the facts of the said case are totally distinguishable from the facts involved in the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee company was not facing any problem of labour turnover. Also, the finding of the lower authorities was that, the assessee had sent Shri. Vedanth Jhaver for short time course to augment his technical competence, but the said Shri Vedanth Jhaver has joined a full fledged Master's Course of Engineering Degree Programme in Computer Science which could not be termed as training course. The lower authorities also taken note of the fact that the said Shri Vedanth Jhaver was introduced by his father Shri. J.K.Jhaver who was the Director of one of the Group Companies, namely, M/s. ZIP Industries Ltd. and from June 2000 Shri J.K.Jhaver has become Director in M/s. Southern Group Industries P. Ltd., which is another Group Company. Further i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p. The children continued their studies even after attaining the age of majority. The fact that one of the sons Viswanathan was sent abroad for further study, cannot be regarded as a deputation made by the firm of one of its partners in connection with the business of the firm. It was in substance, only a step taken by the father who is naturally interested in giving the best possible education to his son, and had sent him abroad to get a higher degree after he completed his B.Com. and M.Com. in India. The agreement that was drawn up was merely one which was intended to give a colour of commercial expediency and was rightly not relied upon by the Tribunal. Counsel for the assessee invited our attention to the decision of the Madhya Prad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Science which could not be termed as training course. (e) No materials or evidence or any compelling reason given as to how the higher studies is indispensable for the company. The above factors were considered by the lower authorities and they have arrived at a correct conclusion that the expenditure incurred for training is not a business expenditure. Also, there is no material to show that there is a commercial expediency or business necessity for sending Shri. Vedanth Jhaver abroad. The reasons given by the lower authorities were based on materials and evidence and the Tribunal has correctly followed the principles enunciated by this Court judgments cited supra. 8. In view of the foregoing reasons, we find no error or legal in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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