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2019 (3) TMI 139 - HC - Income TaxAddition u/s 40A(2)(b) - remuneration paid to trustees - reasonableness of the expenditure - the entire amount paid as remuneration to the Directors was allowed by Tribunal in upholding the view of CIT (Appeals) - HELD THAT:- Trust has been created for the purpose of doing business. Trust has earned income and the remuneration is paid to the trustees. The trustees have also paid taxes for the remuneration received by them. Therefore, it is not for the AO to conclude what is an appropriate payment or remuneration to be paid to the trustees. As in the case of S.A Builders Ltd. v. CIT [2006 (12) TMI 82 - SUPREME COURT] held that the reasonableness of the expenditure is to be judged from the point of view of the businessman and the Revenue cannot sit in the arm chair of the businessman to decide what is reasonable and what is not. - Decided in favour of assessee. Foreign travel expenses - allowable business expenses u/s 37(1) - AO disallowed the claim based on the type of visa, which the trustee had produced for consideration - HELD THAT:- It does not mean that under a tourist visa, no business can be transacted. There is no material to indicate that no business was done by the assessee in these trips. Therefore, the order of the CIT(A) as well the Tribunal is just and proper. Under the circumstances, we hold that Tribunal was right in allowing the foreign travel expenses incurred by the trustee and thereby, the ingredients under Section 37(1) - Decided in favour of assessee.
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