9911796707
TMI Blog2011 (11) TMI 369X X X X Extracts X X X X X X X X Extracts X X X X ..... s 263 dated 26.9.2008, in passed in respect of assessment framed under section 143(3) of the Income Tax Act, 1961. 2. The issue lies in a narrow compass of material facts. The assessee is an Architect and Engineer. During the course of assessment proceedings, the Assessing Officer disallowed Rs. 12,73,550 out of "foreign travel expenses (remitted)" and Rs. 49,73,450 out of provision for "foreign travel expenses (provision)". Firstly, the AO was of the view that "no supporting documents of such traveling tickets, bank statements or any supporting documents for exploring business in USA were submitted by the assessee in support of his claim". Based on this reasoning, the Assessing Officer disallowed Rs. 12,73,550 in respect of foreign travel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llow Rs. 49,73,450. Aggrieved, inter alia, by these two disallowances made by the Assessing Officer, the assessee carried the matter in appeal before the CIT(A) but without any success. 3. However, there was one more head of traveling expenses i.e. foreign travel by relatives amounting to Rs. 12,01,113 in respect of which, the AO did not make any observations at all. It is this claim for deduction which is subject matter of revision proceedings before us. 4. Subsequently, the Commissioner had an occasion to peruse the case records and he opined that not disallowing the claim of Rs. 12,01,113 in respect of foreign travel by relatives/daughters, rendered the order erroneous and prejudicial inasmuch as while provision for similar traveling e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after giving proper opportunity of being heard to the assessee. 5. We have heard the rival contentions, perused the material on record and duly considered factual matrix of the case as also the applicable legal position. 6. The main thrust of learned counsel's submissions before us is that the expenditure of Rs. 12,01,113 incurred by the assessee on foreign travel of his four daughters, who are said to be professionally qualified, who visited India in connection with assessee's business work, that this travel was in connection with legitimate business interest of the assessee, that these persons are highly qualified in the field, and that all the relevant details were duly filed before the Assessing Officer. It is submitted that since the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... timate business interest and also in the absence of necessary documents and evidence to substantiate the same. No doubt these observations are made in respect of admissibility of deduction for provision of foreign travel expenses by the relatives, but these observations are made also on the merits of inadmissibility on merits as well. Once the Assessing Officer takes the stand that the provision for foreign travel expenses cannot be allowed, inter alia, because the travel by relatives cannot be treated for the purposes of business of the assessee, there cannot be any good reasons to allow the claim for deduction on actual basis, without dealing with the merits of such expenses, without conducting any enquiries. As learned Commissioner has r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... discussion whatsoever with regard to the admissibility of expenditure actually incurred and paid on foreign travel of the relatives. It is well settled in law that the Commissioner can regard the order as erroneous on the ground that in the circumstances of the case the Assessing Officer should have made further inquiries before accepting the statements made by the assessee in his return. The AO cannot remain passive in the face of a return which is apparently in order but calls for further inquiry. It is his duty to ascertain the truth of the facts stated in the return when the circumstances of the case are such as to provoke an inquiry. The order becomes erroneous because such an inquiry has not been made and not because there is anythin ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
