TMI Blog2010 (4) TMI 1063X X X X Extracts X X X X X X X X Extracts X X X X ..... - BOMBAY HIGH COURT] , we decide this issue in favour of the assessee and against the Revenue. Disallowance of traveling expenses - assessee has failed to produce verifiable vouchers and addresses - CIT(A) has reduced the disallowance from 10% to 5% - HELD THAT:- Since the traveling expenses are petty in nature and keeping in view the nature of the business of the assessee at the sites located in remote areas, it not always possible to obtain proper vouchers for the said expenditure. Even otherwise, when the expenditure has not been found as abnormal in comparison to the total turnover and income admitted by the assessee, then it is not justified on the part of the lower authorities to disallow certain percentage of the expenses whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... officer and thereby confirming the disallowance of traveling expenses to ₹ 74,400/- ignoring the fact that the same have been incurred for the purpose of business and constitute genuine business expenditure. Your appellant submits that the traveling expenses disallowed should be allowed in full under the given facts and circumstances. 3. The learned CIT(A) in granting only partial relief to the extent of 50% of the total expenditure disallowed by the assessing officer and thereby confirming the disallowance of business promotion expenses to ₹ 31,900/- ignoring the fact that the same have been incurred for the purpose of business and constitute genuine business expenditure. Your appellant submits that the business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nst the amounts payable by them. The AO did not accept the explanation of the assessee and disallowed the amount of ₹ 7,66,246/-. On appeal, the CIT(A) has also confirmed the disallowance made by the AO. 3. Before us, the ld. A.R. of the assessee has submitted that the assessee is having two separate agreements towards office rent as well as other common services regarding office upkeepment. The assessee has not paid any amount to Reliance Energy Ltd. and the amount payable was adjusted by Reliance Energy Ltd. by way of account entries towards the amount payable by Reliance Energy Ltd. to the assessee. Thus, the ld. A.R. has contended that there is no transfer of money or payment through cheque or draft and, therefore, no disallowa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he expenses were for office upkeeping as revenue receipt in the hands of Reliance Energy Ltd. and not a pure reimbursement of expenses. Respectfully following the decision of the Hon'ble jurisdictional High Court (supra), we decide this issue in favour of the assessee and against the Revenue. 6. The next issue is regarding disallowance of traveling expenses. The assessee has debited an amount of ₹ 14,88,000/- as traveling expenses. The AO made a disallowance @ 10% amounting to ₹ 1,48,000/- and added back to the total income of the assessee for want of supporting evidence and verifiable vouchers. On appeal, the CIT(A) has reduced the disallowance from 10% to 5%. 7. Before us, the ld. A.R. of the assessee has submitted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in remote areas, it not always possible to obtain proper vouchers for the said expenditure. Even otherwise, when the expenditure has not been found as abnormal in comparison to the total turnover and income admitted by the assessee, then it is not justified on the part of the lower authorities to disallow certain percentage of the expenses which is ad hoc in nature. Having regard to the facts and circumstances and nature of the expenses as well as the business activities of the assessee, we do not find any reason to disbelieve the explanation of the assessee. Accordingly, the addition sustained by the CIT(A) is deleted. 10. Ground nos.3 and 4 relate to disallowance of business promotion expenses. We have heard the ld. A.R. as well as t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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