TMI Blog2011 (8) TMI 478X X X X Extracts X X X X X X X X Extracts X X X X ..... . R.S. Negi for the Appellant. Chandra Sekhar for the Respondent. ORDER Rajpal Yadav, Judicial Member. The revenue is in appeal before us against the order of Learned CIT(Appeals) dated 28.12.2010 passed for assessment year 2008-09. On receipt of notice in the revenue's appeal, assessee has filed cross objection bearing No. 177/Del/2011. 2. The first substantial grievance of the revenue is that the Learned CIT(Appeals) has erred in deleting the addition of Rs. 7,58,676 incurred by the Assessing Officer on foreign travelling. 3. The brief facts of the case are that the assessee company was incorporated on 2nd June, 2004. It is in the business of running pre-nursery school. In financial year 2007-08, it emerges out that it has been running schools at 4 places, namely, 22 West Patel Nagar, New Delhi (b) E-15, Model Town, New Delhi; (c) C-54, B/1, Sector 61, Noida and (d) 4103-4104 DLF Gurgaon. It has filed its return of income electronically on 31.3.2009 declaring an income of Rs. 2,00,12,041. A search and seizure operation was conducted in this case on 28th September, 2007. On scrutiny of the accounts, it revealed to the Assessing Officer that the assessee h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant submitted in detail the purpose of the visit along with copy of board resolutions. The appellant had submitted all the bills and vouchers in connection with foreign visits along with various correspondence with difference parties. Moreover the appellant has also paid fringe benefit tax on the entire amount of foreign travel expenses. On the facts and circumstances of the case and after considering the details submissions and relevant documents submitted before the undersigned I am of the considered opinion that the expenses on foreign travel are for business purposes and therefore no disallowance on this ground is tenable. Accordingly, I direct the Assessing Officer to delete the said addition". 5. Learned DR while impugning the order of the Learned CIT(Appeals), submitted that in the written submissions, no where assessee has referred any evidence which can demonstrate a live link between the expenses and the object of the assessee for furtherance of its business. The assessee had made elaborate full-fledged submission which only highlights how an individual can improve his understanding or personality by undergoing exchange program or training at different educationa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [1967] 72 ITR 612 (SC); Aluminium Corporation of India Ltd. v. CIT [1972] 86 ITR 11 (SC) and CIT v. Panipat Woollen and General Mills Co. Ltd. [1976] 103 ITR 66 (SC)." 7. There is no dispute about the quantification of expenses. There is no dispute that the amount has been incurred on the foreign travel. The only dispute between the revenue and the assessee is whether the amounts spent by the assessee was exclusively used for the purpose of the assessee's business or not. The arguments raised before the Learned CIT(Appeals) as well as before us by the learned counsel are in connection with peripheral issues of the development of a person in the better administration of pre-nursery school. It has only highlighted how assessee is successful in this area. It has also submitted how the business has been taken to new height. The assessee has filed two paper books containing 150 pages and 204 pages. We confronted the learned counsel to drew our attention to the documentary evidence exhibiting any correspondence entered by the assessee with the institution, where its director, chairperson or other employee went for developing communication skill or training. He was unable to refer a sin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... keting expenses. While dealing with the issue regarding claim of foreign travelling expenses, we have discussed the principles for allowing expenses incurred for the purpose of the business, in the foregoing paragraphs. We took cognizance the decision of the Hon'ble jurisdictional High Court in the case of Dalmia Cement Ltd. (supra). The expenses claimed by an assessee can be disallowed if it is proved that these were not incurred for the purpose of the business. It is not in the dominate of the Assessing Officer to judge the expenses whether they were necessary for the business or not. Hon'ble Jurisdictional High Court in the case of Dalmia Cement (P.) Ltd. (supra) has examined this principle and propounded that Assessing Officer should not sit in the judgment seat of a businessman for deciding the necessity of such expenses for the purpose of the business. Assessing Officer has disallowed the claim on the ground that there was no need to incur such expense. He has not doubted the quantum of expenses vis- -vis incurred for the purpose of the business or not. In his opinion, it is not necessary for the assessee to incur marketing expenses. Considering the facts and circumstances an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any possible. It will be a cumbersome exercise. He expressed his apprehension that it will be followed in the subsequent year as a precedent and in other year assessee might have incurred crores of rupees under this head unnecessary disallowance would be there without recording any specific finding on the vouchers. Learned DR on the other hand relied upon the order of the Learned CIT(Appeals). 15. We have considered the rival contentions and gone through the record carefully. The two revenue authorities have concurrently held that vouchers, bills etc. submitted by the assessee are not fully verifiable. Taking into consideration the facts and circumstances and the details submitted by the assessee, we are of the view that no fruitful purpose will be served by setting aside the issue of Rs. 70,000. The ends of justice would met if we record a finding that in in subsequent year, this disallowance should not be treated as a precedent. Assessing Officer shall examine, if think necessary, the each voucher and then work out the exact disallowance instead of making an estimated disallowance. The assessee has been harping that it is maintaining complete details. Under such situation, it i ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
