TIRUPATI SERVICES PVT. LTD.,KANPUR vs. ACIT, NEW DELHI

The present appeal has been filed by the assessee against the order of the ld. CIT(A)-33, New Delhi dated 06.07.2015.

Following grounds have been raised by the assessee:

Straight to the facts of the case:

From the above, it can be held that the assessee has sufficient own interest free funds available to make investments has not incurred any interest cost on the investment and also has not earned any dividend. In the absence of any earning of exempt income no disallowance is called for.

From the records, it is gathered that Sri Vineet Chandra & Smt. Nidhi Chandra, Directors of the Company undertook Journey to Paris via London w.e.f. 13.11.2009 to 20.11.2009. The invitation was received from Jonathan Whartman, Executive Vice President of MDT Armor, a US Corporation operating in Auburn, Alabama. MDT Armor organized a booth at the Milipol Defence Show in Paris on November, 17 to 20. Invitation was received for visiting the aforesaid booth at Paris. The photocopy of Invitation letter was furnished at the time of assessment proceedings. The invitation was put up before the Board of Directors for considering the necessity of visiting the booth at Paris. The assessee visited the place in the wider interest of business and to explore the possibilities of supplies of various kinds of vehicles and to interact with other businessmen. A copy of Resolution passed in the meeting of Board of Directors was also furnished before the learned AO. The A.O. observed that since there is no connection between the Paris Defense Equipments and vehicle show and held that the bookings done for three people was a pleasure trip in the garb of business trip and so, the said expenses being personal in nature are disallowed.

The fact that foreign tour to Paris was for the purpose of business was submitted before the learned AO. As per books of account the total amount of expenses on travelling head is Rs.13,22,932/-. Out of this, expenses incurred on foreign travelling by the directors is to the tune of Rs.7,97,915/-. Rest of the travelling expenses is Rs.5,25,017/- by directors and employees. It would be seen that the total amount on foreign

The Ld. A.O. disallowed a sum of Rs. 2 lacs for hotel booking in Paris and Netherland on estimate basis whereas invoice No. 30 of Avikrit Travel is consisted of amount of Hotel Booking in Paris. Furthermore, in fact the aforesaid two directors neither stayed in Netherland nor the tour was aimed for the visit of Netherland. Besides, no expenses are incurred and accordingly no expenses are debited in the books of account for Netherland. Only VISA was obtained for Netherland in order to be an easier course in obtaining VISA for visiting Paris. As such, disallowance of Rs.2,00,000/- on estimate basis is without any base. Secondly the above two directors under took journey to abroad and none else was there. So the observation of the Ld. A.O. for three persons is incorrect and without any basis. Since, the expenditure is incurred for the Directors of the company in relation to the business affairs, no disallowance is called for in this case.