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TMI Blog2012 (11) TMI 805X X X X Extracts X X X X X X X X Extracts X X X X ..... in deleting the disallowance to Rs.27,91,931/- made by the AO u/s.40(a)(ia) of the IT Act." 3. The learned DR referred to the relevant portions of the assessment order in support of the case of the Revenue. He submitted that the assessee-company could not prove that it represented on behalf of the principal company and not of its own. He has relied on the order of the AO. The learned counsel of the assessee submitted that the assessee has not claimed any deduction of the amount in dispute, and therefore no disallowance under Section 40(a)(ia) of the Act should be made. He submitted that it was a case of reimbursement of the expenses, and therefore, the amount was not taken to the profit and loss account. He relied on the order of the CIT(A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lling and distributing the products of the principal. He submitted that the contention that the directors had travelled to USA/China for analyzing the latest fashion trend, did not hold ground. He submitted that the assessee was specifically asked to furnish any evidence in support of its claim of business purpose in incurring of travelling expenses, but the assessee could not furnish any evidence in support of its claim. There is no material brought on record by the assessee to suggest that the travelling by the directors to foreign land have enhanced and brought value to its own business and in fact these expenses did not have any relevance to the business of the assessee. He referred to the relevant portions of the assessment order in su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as copies of various documents/correspondences filed in the compilation before the Tribunal. We find that the fact that two directors of the assesseecompany have visited USA/China, is not in dispute. However, the business purpose of these visits could not be established by the assessee-company. The assessee was given a specific opportunity to show cause the business purpose of the foreign traveling expenses vide order sheet entry dated 19.11.2010 by the AO. The AO has recorded that the assessee could not furnish any evidence in support of this claim. There is force in the argument of the AO recorded in the assessment order that the assessee's business is that of franchisee of Aditya Birla Nuvo Ltd., and the assessee was engaged in selling ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tter of Aditya Birla Nuvo Ltd. dated 5.8.11 is after more than four years from the end of the relevant period and whether this letter written by the Area Manager of the Principal company after more than four years, has any relevance to the foreign visit undertaken by the one of the directors to the USA is not established. The letters of the two directors during the relevant period addressed to the assessee-company mentioning the places where they have visited does not inspire confidence. We find that preponderance of probabilities are not in favour of the assessee, and the assessee should have led more evidence to establish the business purpose of the foreign visit by its two directors. In this view of the matter, we hold that the disallowa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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