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1 - 8 of 8 (0.24 seconds)Section 35AB in The Income Tax Act, 1961 [Entire Act]
The Companies Act, 1956
The Income Tax Act, 1961
Commissioner Of Income-Tax vs Hindustan Hosiery Industries on 24 September, 1993
In the case of CIT v. Hindustan Hosiery Industries [1994] 209 ITR 383 (Bom) the expenditure was incurred for sending to USA one of the partners of the assessee-firm, a manufacturer of nylon socks and underwear, for obtaining a degree in business management from an American university. The expenditure was held not allowable as business expenditure as there was no nexus between the expenditure and the business of the assessee-firm. Therefore, it is sine qua non that the assessee must establish the nexus between the expenditure and the business of the assessee-firm.
Sakal Papers Pvt. Ltd. vs Commissioner Of Income-Tax, Poona on 9 November, 1977
In the case of Sakal Papers Pvt. Ltd. v. CIT [1978] 114 ITR 256 (Bom), the assessee was a closely held company with two directors. It published a leading Marathi newspaper. The directors were husband and wife. Their daughter, who was a Master of Arts with English and French as special subjects, worked in the editorial department of the paper, starting as an apprentice, from September, 1955. She was sent to U.S.A. in 1960, for specialised education in journalism and business administration. The directors believed that it would be good for the progress of the paper. She attended the Graduates' School of Journalism at Columbia University in New York and secured the degree of Master of Journalism and, thereafter, spent three months to obtain practical training in printing and lithography. On her return from U.S.A., she again joined the editorial department of the company and she was still working with the company. There was no agreement between her and the company binding her to serve the company for a specified period of years. The Assessing Officer disallowed the amount. The Appellate Assistant Commissioner confirmed the order of the Assessing Officer. The Tribunal found that the selection for training in U.S.A. of the daughter could not be attributed to any extra-commercial consideration and since the company had not taken any commitment about the service from the trainee, it had not behaved in a sensible or business like manner. As such, the disallowance was upheld. The High Court has held that merely because there was no commitment or contract or bond taken from the trainee, the expenditure which was otherwise proper, cannot be disallowed to the company, particularly when as a result of that expenditure the trainee had secured both a degree and training which could be of assistance to the asses-see-company and she had in fact served the company on her return to India. The factum of relationship itself would be an assurance that as far as possible, the result of the training would be utilised for the benefit of the company. Therefore, the expenditure incurred on the foreign education of the daughter was allowed.
Article 5 in Constitution of India [Constitution]
Section 115J in The Income Tax Act, 1961 [Entire Act]
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