Expenditure on foreign education of employee's son whether deductible?

Question

Whether expenditure on foreign education of director’s son deductible.

Answer

Prima facie expenses are not deductible since personal expenses. But if it is proved that this expenses is incurred wholly and exclusively for the purpose of business then it is allowed as deduction under section 37.

Now let us under the case.

1.    His son was a commerce graduate.

2.   The assessee’s business is in investments and securities.

3.  He wished to pursue an MBA after serving for an year with the company and committed himself to work for a further five years after finishing his MBA.

4.   There is nothing on record to suggest that such a transaction is not honest.

5.   His son has chosen that subject of study which would aid and assist the company and is aimed at adding value to its business.

Conclusion

Assessee was allowed deduction under section 37.

Held in Kostub Investment Ltd vs. CIT (Delhi High Court)