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TMI Blog2018 (9) TMI 967X X X X Extracts X X X X X X X X Extracts X X X X ..... ould render the decision perverse. Perusal of the grounds of appeal filed before the CIT(A) shows that the assessee has specifically raised the point regarding non-consideration of the materials placed before the assessing authority. Yet the CIT(A) did not make an endeavour to examine the stand taken by the assessee, resulted in non-consideration of the materials placed - Decided in favour of assessee - Tax Case (Appeal) No.929 of 2008 - - - Dated:- 7-8-2018 - Mr. T. S. Sivagnanam And Mrs. V. Bhavani Subbaroyan JJ. For the Appellant : Mr.Vikaram Vijayaraghavan For the Respondent : Mr.D.Prabhu Mukunth Arunkumar JUDGMENT T. S. SIVAGNANAM, J. This appeal by the assessee is questioning the correctness of the order passed by the Income Tax Appellate Tribunal (ITAT) Madras A Bench in ITA No.1811/Mds/2004, dated 23.03.2007 for the assessment year 2001-02. 2.The assessee is a professional firm of Consulting Engineers Architects. For the assessment year 2001-02, the appellant filed a return of income admitting loss of ₹ 6,65,428/-. The assessment was completed under Section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el for the Revenue. 7.The learned Standing Counsel for the Revenue raised a preliminary objection stating that the question, which has been framed for consideration, is not a substantial question of law, but entirely factual. 8.By relying upon the decision of the Hon ble First Bench of this Court in the case of Janardhanam Balaji vs. The Additional Commissioner of Income Tax, Kancheepuram Range [MANU/TN/2522/2017], it is submitted that to be substantial a question of law must be debatable, not previously settled by law of the land or a binding precedent, and must have a material bearing on the decision of the case. 9.There can be no quarrel over the proposition that in an appeal filed under Section 260A of the Act, this Court cannot act as the third appellate authority over an order passed by the Tribunal. Therefore, what is to be considered by this Court is as to whether a substantial question of law arises for consideration. 10.At the first blush, the contention advanced by the learned Standing Counsel for the Revenue appears to be impressive. However, we find that on a closer scrutiny into the material papers, what is sought to be challenged before this Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was engaged in re-rolling and claimed expenditure for meeting the cost of travel to USA and the expenses connected with the education of the son of the Director of the company, who had acquired an M.B.A. Degree. There was no agreement between the company and son before he was sent to abroad. There was no requirement that he should join the company after completing his education. In the said facts and circumstances of the case, the Court held that the expenditure, which a father incurs out of his natural love and affection for his children in meeting the cost of their education, cannot become a business expenditure merely because he is also the owner or a director of a business in which the son of the daughter subsequently takes part. 14.In the instant case, we find that substantial factual material was placed before the Assessing Officer as well as before the CIT(A) and the Tribunal. To that extent, the learned counsel for the appellant has filed the copy of the written submissions filed before the CIT(A). From the facts placed, it is seen that the assessee s son has completed his B.E. degree in April 2000 and joined as a partner of the firm in the same month. All the partners ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. Learned Standing Counsel for the Revenue pointed out that in the said case prior to the daughter being selected and sent for education aboard, for nearly 5 years she has worked as an apprentice in the firm. 17.In our considered view, the son of the partner had already been inducted as a partner of the firm before he was sent abroad, in the sense that prior to the son being sent to Australia for higher education, he had already been inducted as a partner and there is material to show that on his return, there has been value addition to the business of the firm and he continued with the firm as its partner. 18.The learned counsel for the assessee referred to the decision in the case of Commissioner of Income Tax vs. Kohinoor Paper Products reported in (1997) 226 ITR 0220 (M.P.). 19.In the said case, the Court after referring to Section 37(1) of the Act held that the expenditure incurred in the training was held to be allowable deduction, as in the said case one Shri Deepak Bhargava was sent to U.S.A. for higher education, but it was obviously for business purposes of the assessee firm and he stayed abroad though for a long period, it is a fact that after complet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aims for funding higher education abroad of the employees of the concern. 24.We have examined the facts placed before the lower authorities and we find that the assessee is a partnership firm consisting of two brothers, two sons of one brother. All the four partners are duly qualified Engineers (B.E.) and the firm is carrying on Engineering Consultancy Profession for leading Indian Corporate Clients. One of the partner's son, Mr.H.E.Sriprakash Shastri, joined the firm in April 2000 after completing his B.E., degree. He had taken active part in the conduct of the business of the firm from the date of his induction as partner. Even while doing his B.E. Degree course, he is stated to have been attending the office of the firm and getting acquainted with reinforced concrete design, planning estimates and construction management. After graduation, he was made a working partner of the firm and he has worked on several projects, which have been mentioned by the assessee. In February 2001, he was sent to Australia for higher education. The duration of the course and training is for a period of two semesters and the course underwent was directly related to the profession carried on b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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