NATWAR LAL GUPTA Vs. ITO

JUDGEMENT

(1.) THIS appeal by the assessed has been preferred against the order dated 1 -9 -2003 of Commissioner (Appeals) -XXX, New Delhi, for assessment year 1097 -98. In various 'grounds, the assessed has challenged the sustenance of addition of Rs. 11,73,015 spent by the employer company on higher education of the appellant treating the same as perquisite under section 17(2)(iv) of Income Tax Act, 1961.

(2.) SHRI Ajay Vohra, learned counsel for the assessed, stated that the appellant is a qualified CFA and was working in Nishigandha Trading (P) Ltd. since 1992. The company intended to diversify its business in the field of merchant Banking, advising of public issue of shares, debentures, portfolio management, etc. For this purpose, it was decided by the Board of Directors to send, inter alia, the appellant to the London Business School for MBA course with specialisation in finance, which knowledge and experience would benefit the company in its business. The entire cost of higher education was borne by the company and the amount was directly paid to the University by the employer company after obtaining necessary RBI permission.

(3.) THE employer company required the appellant to execute a bond to serve the company for seven years on return in consideration of the employer company sponsoring the appellant for higher education. In case the appellant did not serve the company for the seven years' period, the amount spent by the company on the higher education of the appellant was to be recovered as loan carrying interest at the rate of 20 per cent per annum.