TMI Blog2012 (7) TMI 478X X X X Extracts X X X X X X X X Extracts X X X X ..... SUDHIR, AND SHRI SHAMIM YAHYA, JJ. Assessee by : Sh. B.D. Sharma, Adv. Department by : D r. B.R.R. Kumar, Sr. D.R. ORDER PER SHAMIM YAHYA: AM This appeal by the assessee is directed against the order of the Ld. Commissioner of Income Tax (Appeals)-XXVIII, New Delhi dated 04.5.2009 pertaining to assessment year 2006-07. 2. The grounds raised read as under:- On the facts and in the circumstances of the case the action of the Ld. CIT(A) in upholding the addition of Rs. 391477/- representing the expenses incurred by the appellant on its foreign visit on business visa to Melbourne is arbitrary and unjust and perverse. The impugned addition sustained deserves to be deleted. 3. In this case AO noted that assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icates that the assessee had gone to Australia to establish a new business entity. Ld. CIT(A) referred to decision of Hon ble M.P. High Court (170 ITR 469) and Allahabad High Court (110 ITR 855), for the proposition that expenditure incurred in connection with foreign tour undertaken for initiation of new business is not allowable. Hence, Ld. CIT(A) held that since the expenditure has been incurred in connection with starting a new business entity in Australia, it cannot be allowed u/s. 37(1). Accordingly, he confirmed the disallowance made by the AO. 5. Against the above order the assessee is in appeal before us. 6. We have heard the rival contentions in light of the material produced and precedents relied upon. Ld. Counsel of the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ening of its new unit was supplement to the existing business in India. There was no material to hold that it amounted to new business. Alembic Chemical Works vs. CIT 177 ITR 377 SC relied upon. The test laid down by the Apex court and the principles laid in the judgements of various High Courts is that where the existing business is to expand or set up a new unit in the same fold, the expenditure incurred in setting up such a unit of existing business is admissible business expenditure. i) CIT vs. Modi Industries Ltd. 200 ITR 341 Delhi High Court. ii) Empire Jute Co. Ltd. 124 ITR 1 SC. iii) CIT vs. Relaxo Foot Wear Ltd. 293 ITR 241 Delhi High Court. iv) Karam Chand Prem Chand (Pvt.) Ltd. Vs. CIT 137 ITR 209 Gujarat. v) Hindus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etting CAN which is the statutory immigration requirement for doing business in Australia. The assessee is a sole Director and sole shareholder of the shares of this company. In this respect, it is assessee s submission that management of its aforesaid overseas unit at Melbourne and its old proprietary business Jeevan Enterprises here in India is the same. Further, there is also complete unity of control and there was common fund which was most relevant for testing whether business was the same. The new unit at Melbourne was part of its existing business in India. The business activities of its Australian company was on the same lines as here in India. In this regard, we find that neither the AO nor CIT(A) have mentioned that there was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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