BINA FASHIONS & FOOD PVT. LTD.,NEW DELHI vs. ACIT, CIRCLE- 5(1), NEW DELHI

This appeal is filed by the assessee against the order of the ld CIT(A)-II, New Delhi for Assessment Year 2015-16 dated 22.11.2018 wherein, the appeal filed by the assessee against the assessment order passed on 05.12.2017 u/s 143(3) of the Act by ld ACIT, Circle-5(1), New Delhi determining total income of the assessee at a loss of Rs. 21,78,090/- against the return loss of Rs. 1,08,73,780/-. The only issue in this appeal is that the ld CIT(A) has confirmed disallowance of Rs. 26,08,706/- on estimated basis being 15% on foreign travel expenditure incurred by Working Director of the assessee company.

The facts shows that the assessee is a company engaged in the business of running of restaurants, beauty parlour services and manufacturing and retailing of garment business. It filed this return of income on 26.09.2015 declaring loss of Rs. 1,08,73,780/-. The assessment order was passed wherein, the foreign travel expenditure incurred by the assessee amounting to Rs. 1,73,91,315/- were examined and 50% thereof were disallowed amounting to Rs. 86,95,688/- for the reason that the director would have taken foreign travel in respect of other companies as well against this disallowance the assessee preferred appeal before the ld CIT(A). He held that the disallowance of 50% is not called for. He retained the disallowance to the extent of 15% of the expenditure. The reason given by the ld CIT(A) was that neither the appellant has established a clear nexuses between travel and business nor the ld AO has Page | 1 made detailed enquiry about the purposes of travels and evidence of business nexus. Thus, the assessee is in appeal before us. At the time of hearing the ld AR submitted that identical issue arose and in case of the assessee for Assessment Year 2014-15 and vide order 31.05.2019 the above disallowances was deleted. He further referred to the detailed paper book containing the details of foreign travel expenditure and supporting the evidence from page No. 1 to 294. Therefore, we find that identical issue involved in the appeal of the assessee for Assessment Year 2012-13 in for Assessment Year 2012- 13.

The ld DR vehemently supported the order of the ld CIT(A).

We have carefully considered the rival contentions and find that in the earlier years the identical disallowances were made which were deleted by the coordinate bench. The latest order is with respect to Assessment Year 2014-15 wherein, vide order dated 31.05.2019 the disallowance out of foreign travel expenditure were deleted. There is no change in the facts and circumstances of the case. Further we find that identical issue involved in the appeal of the assessee for Assessment Year 2012-13 in ITA No. 610/Del/2016 for Assessment Year 2012-13. Therefore, respectfully following the decision in the case of the assessee’s own case we direct the ld AO to delete the disallowances out of foreign travel expenditure. Further, the overwhelming evidence produced by the assessee in the paper book filed before us does not lead to any evidence for the expenditure incurred by the assessee were not wholly and exclusively for the purpose of the business. The disallowance made by the ld AO and partly confirmed by the ld CIT(A) were not based on any evidence that in part of such expenditure is not for the purpose of the business. Thus, we allow solitary ground of appeal