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2010 (5) TMI 58 - HIGH COURT OF DELHIForeign traveling expenditure – claim of provision made for warranty - The Assessing Officer had disallowed 25% of the foreign travel expense and had also made disallowance with regard to the claim in respect of the provision for warranty made by the Assessing Officer. The disallowance of 25 % was reduced to 10% by the Commissioner of Income Tax (Appeals) in respect of foreign travel expenditure. Ultimately, the Income Tax Appellate Tribunal deleted the entire disallowance. Held that: It is clear that the field engineers, who were sent abroad, were actually earning revenue for the company in the form of service charges and the company was earning as much as US $ 600 per day. The Commissioner of Income Tax (Appeals) thought this to be a ground for reducing the disallowance from 25 % to 10 % which, in the view of the Income Tax Appellate Tribunal, was ground enough for deleting the entire disallowance. Once the assessee company was receiving charges in respect of the field engineers, who had gone abroad, the travel expenses in respect of such field engineers could not have been disallowed. – claim of provision made for warranty allowed
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