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Facts
The Assessing Officer (AO) made an addition of Rs. 4,00,000/- on account of unexplained expenditure u/s. 69C of the Act for foreign travel. The assessee provided some documents but failed to file all relevant evidence for the expenses incurred.
Held
The Tribunal acknowledged that the assessee did travel abroad twice and that expenditure to the extent of Rs. 1,00,000/- per trip could not be ruled out. The addition made by the AO was restricted to Rs. 2,00,000/-.
Key Issues
Whether the unexplained expenditure for foreign travel incurred by the assessee is wholly justified, or if a partial disallowance is warranted based on available evidence.
Sections Cited
69C, 250
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Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI
Before: SHRI NARENDER KUMAR CHOUDHRY, JM
This appeal has been preferred by the Assessee against the order dated 15.07.2025, impugned herein, passed by the Ld. Commissioner of Income Tax (Appeal) 53, Mumbai (in short Ld. Commissioner) u/s 250 of the Income Tax Act, 1961 (in short ‘the Act’) for the A.Y. 2020- 21.
In the instant case, the Assessing Officer (AO) made the addition of Rs. 4,00,000/- on account of unexplained expenditure incurred u/s. 69C of the Act being expenditure of Rs. 2,00,000/- per foreign trip from Mumbaii. It appears from the assessment order that the assessee has provided general reply but has not provided any documentary evidences or source of money by which the travel expenses have been incurred, as observed by the AO. However, from the paper book filed, it appears as claimed by the assessee that the assessee before the authorities below has filed various documents such as copy of passport, copy of personal bank account statement highlighting withdrawals during the relevant year, copy of explanation filed before the AO, copy of submission filed before the Ld. Commissioner, copy of ticket/invoice for Dubai trip undertaken in FY 2022-23 (Rs. 62,928/-), etc. From invoices dated 30.05.2022 and 02.06.2022, it appears that the assessee has spent Rs. 6,750/- on dated 02.06.2022 as VISA booking charges and Rs. 35,178/- on dated 30.05.2022 as aviation booking charges. Admittedly, the assessee failed to file all the relevant documents in support of its claim. However, considering the peculiar facts and circumstances, as it is not in denial by the authorities below that the assessee travelled foreign country twice and therefore, the expenditure incurred reasonably to the extent of Rs. 1,00,000/- per trip cannot be ruled out and thus, as the parties have also agreed to, this Court for the ends of litigation and substantial justice, is inclined to restrict the addition made by the AO to the extent of Rs. 2,00,000/-only. Consequently, the addition is restricted to the tune of Rs. 2,00,000/- as against the addition of Rs. 4,00,000/- made by the AO and affirmed by the Ld. Commissioner u/s. 69C of the Act.