9911796707
TMI Blog2006 (6) TMI 86X X X X Extracts X X X X X X X X Extracts X X X X ..... wife Mrs. W.S.P. Machado. They were the directors of the company. The company sent T.J. Machado, son of the abovementioned lady director to a foreign country for getting education and bore the entire expenses of Rs. 2,04,807 relating to such foreign education in the assessment year 1989-90. The Assessing Officer disallowed the claim of the assessee towards the expenses under consideration on the ground that the expenses did not relate directly to the income earned and that the connection of the entire expenditure with the company depended on the probability of return of T.J. Machado and to continue with the company. In appeal, the Commissioner (Appeals) reversed the order of the Assessing Officer. A second appeal was filed by the Departme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e wants the reference to be answered in favour of the assessee. Per contra, Sri Seshachala, learned counsel for the Revenue would oppose the reference by contending that the facts of the case would show that the Tribunal is fully justified in coming to a right conclusion in the matter of disallowance in the given circumstances. After hearing, we have carefully perused the material on record. The admitted facts would reveal that the company belongs to the Machado family. Sri Machado and his wife were the directors. Their son was sent to the USA and in the process, the company incurred an expenditure and that expenditure was sought to be included for the purpose of assessment by way of business expenditure. The Assessing Officer by a detail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on hand. The bundle of facts as referred to by the Tribunal, in our view, would justify the order of the Assessing Officer. It is not as though any specialised training was given to the son and it was not as though it was absolutely necessary for the purpose of running a business. In the given circumstances and on the facts of this case, we are satisfied that the order of the Tribunal is based on the facts. The Tribunal is fully justified in rejecting the contentions of the assessee. Learned counsel for the assessee invites our attention to the judgment of the Bombay High Court in Sakal Papers P. Ltd. v. CIT [1978] 114 ITR 256. A close reading of the said judgment would show that in that case in pursuance of a resolution of the directors d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the section is meant for in the case on hand. We would be failing if we do not refer to the three judgments cited by the Revenue. In fact, the Madras High Court in two judgments namely, CIT v. R.K.K.R. Steels P. Ltd. [2002] 258 ITR 306 and M. Subramaniam Bros. v. CIT [2001] 250 ITR 769 has chosen to consider a similar issue. The Madras High Court in the case of CIT v. R.K.K.R. Steels P. Ltd. [2002] 258 ITR 306 has chosen to refer to its earlier decision in M. Subramaniam Bros. v. CIT [2001] 250 ITR 769. After referring the Madras High Court has chosen to hold as under: "It was canvassed for the assessee before the Tribunal that the fact that Rajiv Rai was the son of the director of the company should not be held against him and the expend ..... X X X X Extracts X X X X X X X X Extracts X X X X
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