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TMI Blog2004 (9) TMI 308X X X X Extracts X X X X X X X X Extracts X X X X ..... echnical subjects alone would be allowed as deduction. It is not proper to say that management studies are not relevant for carrying on a business. Therefore, the distinction made by the AO on the basis of the subject studied abroad is without any conviction. But, for the difference in the subjects studied abroad, the facts of the case reported in Sakal Papers (P) Ltd. vs. CIT [ 1977 (11) TMI 36 - BOMBAY HIGH COURT] are exactly similar to the facts involved in the present case. Miss Reshma Lalwani, being an employee of the assessee-company, the case of the assessee-company is on a better footing. In addition to this, the decision of the Tribunal in the case of D.M. Harish Co., lent support to the argument of the assessee. In the said case a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A.B. Joshi, Adv. Order 1. This appeal is filed by the assessee. The relevant assessment year is 1997-98. The appeal is filed against the order of the CIT(A)-VI at Mumbai, dt. 6th Oct., 2000, and arises out of the assessment completed under s. 143(3), of the IT Act, 1961. 2. The assessee in this case is a company engaged in manufacturing of welding transformers, rectifiers and engineering items. The assessee-company incurred an expenditure of Rs. 6,75,237 during the relevant previous year, towards foreign study expenses of Miss Reshma A. Lalwani, Miss Reshma A. Lalwani is the daughter of a director of the assessee-company and also an employee of the assessee-company. According to the assessee-company Miss Reshma A. Lalwani was sent to Brita ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on by the assessee. In the present case, the AO found that the assessee was more engaged in technical activities and Miss Reshma Lalwani was sent abroad for studies in business administration and it did not have any direct nexus with the business carried on by the assessee-company. The first appeal filed by the assessee has been dismissed. Therefore, the second appeal is filed before us. 4. We heard Shri Prakash K. Jotwani, the learned advocate appearing for the assessee. He submitted that the distinction made by the AO with reference to the decision reported in 1978 CTR (Bom) 318 : (1978) 114 ITR 256 (Bom) is not justified. He contended that the facts of the present case are different from the facts of the case reported in (1994) 209 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... almost identical to the facts of the case considered in the case of Sakal Papers (P) Ltd. vs. CIT. In that case also it was the daughter of the director of the assessee-company who was sent abroad for higher studies in journalism. In the present case, Miss Reshma A. Lalwani is the daughter of one of the directors of the assessee-company but also an employee of the assessee-company. The assessee-company is in a better footing in the present case. Not only that, Miss Reshma Lalwani on returning to India continued to work for the assessee-company in compliance of the agreement she had entered into with the assessee-company before leaving India. She has been further made as a director of the assessee-company. Therefore, the relation of Miss Res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the Tribunal in ITA No. 227/Bom/82, dt. 29th May, 1984, in the case of D.M. Harish Co., lent support to the argument of the assessee. In the said case also it was the son of a partner of the assessee-firm, who went abroad for higher studies in law. Therefore, the relation of the student with the director or partner of the assessee need not weigh that much against the assessee. 8. Furthermore, it is to be seen that the AO has allowed the same expenditure for the immediately succeeding asst. yr. 1998-99 in the case of Miss Reshma A. Lalwani herself. Therefore, we do not find any reason why the expenditure incurred for the same event should not be allowed in the impugned asst. yr. 1997-98. 9. Therefore, we direct the AO to treat the amou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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