Satish Chandra, J. - (1.) PRESENT appeal under Section 260 -A of the Income Tax Act 1961, has been preferred against the judgment and order dated 14.07.2010 passed by the Income Tax Appellate Tribunal, Lucknow in ITA No. 2/Luc/2010 for the Assessment Year 2004 -05. On 18.08.2011, a Coordinate Bench of this Court has admitted the instant appeal on the following substantial question of law: The learned Income Tax Appellate Tribunal has erred in law and in facts in treating the single scholarship expense of Rs. 14,71,199.00 as business expenditure even though the assessee failed to prove that this expenditure was for the benefit of his business.
(2.) THE brief facts of the case are that the assessee is a registered company under the Companies Act, 1956 and engaged in running a coaching institute for Engineering and Medical and other Competitive examinations. During the assessment year under consideration, the assessee has given a Scholarship to Sri Akash Kumar, a student, for getting education in Drexel University in Philadelphia, USA. During the scrutiny, the A.O. observed that the Scholarship has been given to a single student and the same cannot be claimed by the assessee as a business expenditure. So, he made an addition of Rs. 14,71,199/ -, which was confirmed by the first appellate authority. However, the Tribunal has deleted the said addition.
(3.) SRI D.D. Chopra, learned counsel for the department has justified the order of the A.O. He at the strength of written submission, submits that the Scholarship was given to only one student namely, Akash Kumar for getting education in U.S.A. He submits that the said expenditure cannot be claimed as business expenditure. Lastly, he justified the addition made by the A.O.;