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Income Tax Appellate Tribunal, DELHI BENCHES: ‘A’, NEW DELHI
Before: SMT. BEENA A PILLAI & SHRI PRASHANT MAHARISHI
ORDER PER BEENA A PILLAI, JUDICIAL MEMBER Present appeal has been filed by revenue against order dated 10/01/15 passed by Ld.CIT(A)-29, New Delhi for assessment year 2014-15 on following grounds of appeal: “The ACIT, Circle - 5(1), New Delhi is hereby filing appeal in the above mentioned case before the 1TAT, New Delhi on the following grounds of appeal. Whether on the facts and in the circumstances of the case and 1. in law. the Ld. CIT(A) has erred in law and on facts in deleting the additions of Rs.74,81,090/- (50% of Rs.1,49,62,183/-) on account of foreign travel expenses entirely on submission of the assessee and DCIT, Circle 5(1) vs. Bina Fashions N Food P Ltd.New Delhi without considering the detailed reasons given by the AO in the assessment order. Whether on the facts and in the circumstances of the case and 2. in law, Ld. CIT(A) has erred in not appreciating the facts that the Mrs. Bina Modi is a Director in four companies, including the assessee company, and the assessee was not able to substantiate whether the above expenses were incurred wholly and exclusively for the business promotion of assessee company only. That the order of the CIT(A) is perverse, erroneous and is not 3. tenable on facts and in law. The appellant craves leave for reserving the right to amend, 4. modify, alter, add or forego any grounds(s) of appeal at any time before or during the hearing of this appeal.”
Brief facts of the case are as under: Assessee filed its return of income declaring ‘nil’ income with current year losses of Rs.28,04,506/- on 29/09/14. Case was selected for scrutiny and notice under section 143(2) along with questionnaire and notice under section 142(1) of the Income Tax Act, 1961 (the Act) was issued to assessee. In response to statutory notices, representatives of assessee appeared before Ld.AO and filed details as called for. 2.1. Ld. AO observed that during year assessee was engaged in business of running restaurants, beauty parlour services and manufacturing and retailing garment business. Ld.AO observed that assessee had debited amount of Rs.1,68,82,921/-, on account of travelling and conveyances. From details filed in regards to travelling and conveyance, it was observed by Ld.AO that major DCIT, Circle 5(1) vs. Bina Fashions N Food P Ltd.New Delhi portion of expenses was on account of foreign travel amounting to Rs.1,49,62,183/-. 2.2. After perusal of submissions advanced by Ld.AO, Ld.AO was of opinion that there was no major improvement in business or income of assessee in comparison with earlier years when there was no foreign travel expenses claimed by assessee while the claim of assessee that she had undertaken travel to keep her abreast of all trends in the world. Ld.AO accordingly rejected the claim of assessee and made an addition is of 50% of travel expenses claimed amounting to Rs.74,81,090/-.
Aggrieved by order of Ld.AO, assessee preferred appeal before Ld.CIT (A) who allowed the claim of assessee.
Aggrieved by order of Ld. CIT (A) revenue is in appeal before us now.
The only issue agitated by revenue is in respect of disallowance deleted by Ld.CIT(A) in respect of foreign travel undertaken by proprietor.
Ground No. 3 and 4 are general in nature and therefore do not require any adjudication.
Ground No. 1-2 is in respect of 50% disallowance deleted by Ld. CIT (A) on account of foreign travel expenses. 7.1. Ld. DR placed reliance upon order passed by Ld.AO. 7.2. Ld.AR submitted that details of all foreign travel along with purpose and the period of travel has been submitted by assessee before authorities below. He submitted that it was after due DCIT, Circle 5(1) vs. Bina Fashions N Food P Ltd.New Delhi consideration of these details that Ld.CIT(A) was right in deleting the addition.
We have perused submissions advanced by both sides in light of records placed before us. 8.1. It is observed that Ld.AO disallowed 50% of foreign travel expenses. Thus it implies he had not disputed that assessee had undertaken foreign travel for purposes of business. For disallowing 50% of foreign travel, Ld.AO has not given any basis except for reason that assessee has not earned any profits during year as compared to earlier years when there was no foreign travel undertaken by the proprietor. The details reproduced by Ld.CIT(A) at page 10-13 of his order narrates purpose for which foreign travel was undertaken. Assessee is in the business of retailing of garments and running of restaurants. Most of the visits to foreign countries have been either for participating in exhibition-cum-sale of garments or exploring restaurants and to have tie-ups for food chains. Ld.AO has also not disputed activities carried out by assessee. We therefore do not find justification in disallowance made by Ld.AO and the same stands deleted. Accordingly these grounds raised
by revenue stands dismissed.
9. In the result appeal filed by revenue stands dismissed. Order pronounced in the open court on 31/05/2019.