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Income Tax Appellate Tribunal, “E” BENCH, MUMBAI
Before: SHRI OM PRAKASH KANT, AM & SHRI AMARJIT SINGH, JM
O R D E R
PER AMARJIT SINGH, JM:
The assessee has filed the present appeal against the order dated 28.05.2019 passed by the Commissioner of Income Tax (Appeals)-52, Mumbai [hereinafter referred to as the “CIT(A)”] relevant to the A.Y. 2015-16.
The assessee has raised the following grounds: - “
1. The learned CIT(A) erred in law and in facts in not holding that the assessment order u/s 143(3) of the Act passed by the AO is bad in law, illegal and null and void. A.Y. 2015-16
2. The learned CIT(A) has erred in law and in facts in not holding that the AO erred in passing the assessment order in gross violation of principles of natural justice.
3. The learned CIT(A) has erred in law and in law and in facts in confirming the disallowance of Rs.20,69,100/- on account of Education Expenses u/s 37(1) of the Act.”
3. The brief facts of the case are that the assessee filed its return of income on 20.10.2015 declaring total income to the tune of Rs.3,51,62,159/-. The case was selected for scrutiny. Thereafter, the notices u/s 143(2) & 142(1) of the Act were issued and served upon the assessee. A survey u/s 133A of the Act was conducted on Transcon group of cases on 22.01.2015. During the course of survey action, various incriminating documents were impounded from the assessee’s premises. The assessee is engaged in the business of real estate developers. It was observed that the assessee has debited of Rs.20,69,100/- on account of Education Expenses. The assessee was asked to produce the documents along with explanation and justification as how these expenses have been incurred wholly and exclusively for the business within the provision of Section 37(1) of the I. T. Act. The explanation of the assessee was not found justifiable, therefore, the said claim was added to the income of the assessee. Total income of the assessee was assessed to the tune of Rs.3,51,62,159/-. Feeling aggrieved, the assessee filed an appeal before the CIT(A) who dismissed the appeal of the assessee, therefore, the assessee has filed an appeal before us.
ISSUE Nos.1 &2 A.Y. 2015-16 4. At the time of argument, these issues have not been pressed by the Ld. Representative of the assessee, therefore, these issues are being decided in favour of the revenue against the assessee being not pressed.
ISSUE NO.3 5. Under this issue the assessee has challenged the disallowance of Rs.20,69,100/- on account of Education Expenses u/s 37(1) of the Act. The appellant has claimed the expenses in his books of account. It is the contention of the assessee is that one of the Director of the company completed the course in relation to knowledge enhancement of the key personnel of assessee company who was managing the day to day business of the appellant since August 1, 2003 i.e. more than 12 years. The said director was also the first director and promoter of the assessee company. The expenses were incurred in relation to the attending of president’s /owner’s management program of Harvard Business School, Boston, USA covering the period from 01.02.2015 to 20.02.2015. The program was designed as an executive program for experienced professionals having relevant work experience who wished to develop analytical and leadership skills necessary to formulate and advocate policy on key international issues. Accordingly, the expenditure incurred by appellant on education of director fulfill the conditions of Section 37(1) and are incurred in furtherance of appellant’s business interest and hence allowable. The contention of the assessee is that the plea was taken before the AO as well as CIT(A) who nowhere discussed this contention nor relevant documents examined. However, the Ld. DR strongly relied upon the order passed by CIT(A) in question. Anyhow, after the perusal of the order of the AO and A.Y. 2015-16 CIT(A) we find this fact that the contention of the assessee was not dealt with by any one of them. The assessee also submitted the relevant certificate. It is liable to be seen whether the expense is for the business purpose in the year or not in view of the decision in the case of CIT Vs. Alfa Laval (I) Ltd. (2005) 149 Taxman 29(Bom). We set aside the finding of the CIT(A) on this issue and restore the issue before the AO to decide the matter of controversy afresh by giving an opportunity of being heard to the assessee in accordance with law. Accordingly, we decide this issue in favour of the assessee against the revenue.
In the result, the appeal filed by the assessee is hereby allowed for statistical purposes. Order pronounced in the open court on 23/02/2022 /-/ (OM PRAKASH KANT) (AMARJIT SINGH) लेखध सदस्य / ACCOUNTANT MEMBER न्यधनिक सदस्य/JUDICIAL MEMBER मुंबई Mumbai; ददनांक Dated : 23/02/2022 Vijay Pal Singh, (Sr. PS)
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