M SUBRAMANIAM BROS Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) COUNSEL contends that form should prevail over substance. The assessee is a partnership firm consisting of father and three children, two sons and a daughter. The sons were aged 23 and 21. The assessment year was 1979-80. The head of the family who was a partner of the firm claimed the amounts spent on educating his younger son abroad as business expenditure. That claim having been negatived by the Income-tax Officer and the Tribunal, though it had been allowed by the Commissioner, the present reference has been brought before us by the assessee. The assessment years with which we are concerned are 1978-79 and 1979-80.

(2.) THE son who went abroad had been initially admitted to the firm even as a minor to share the benefits of the partnership. He attained majority in the year 1974. He did not take active part in the business of the firm but continued his studies for B.Com. and then M.Com. After completing his studies in India, he went abroad to do M.B.A. He returned to India in 1979. It is only after his return, he appears to have taken some part in the business activities of the firm.

(3.) THE question referred to us as to whether the Tribunal was right in holding that a sum of Rs. 51,019 incurred by the appellant for the assessment year 1978-79 and the sum of Rs. 20,764 for the assessment year 1979-80 in connection with the training of its partner, Mr. T. S. Viswanathan, is not an allowable deduction in the hands of the firm, is answered in favour of the Revenue and against the assessee.