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Adani Energy Ltd. (Formerly known as Gujarat Adani Energy Ltd.) Versus The Addl. CIT

Disallowance of traveling expenses - CIT(A) confirmed disallowance - Held that:- CIT(A) has not adverted to the submissions of the assessee as he had specifically submitted that the expenditure have been incurred on travelling of the executives for the business purpose of the assessee-company. There is no dispute with regard to proposition that deduction of expenditure is allowable if same is incurred for the business purpose. The assessee is required to demonstrate the business purpose.
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MI 9 - SUPREME Court ) and Madhav Prasad Jatia vs. CIT (1979 (4) TMI 2 - SUPREME Court ), we are of the considered view that the ld.CIT((A) was not justified in rejecting the ground on the basis that there is nexus between the expenditure incurred and the business of the assessee-company. Therefore, we hereby set aside the order of the ld.CIT(A) and direct the AO to delete the addition. - Decided in favour of assessee. - I.T.A. No.2178/Ahd/2011 - Dated:- 10-4-2015 - Shri N.S. Saini AndShri Kul B .....

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treating Ground No. 1 of the appellant's appeal challenging the validity of the assessment order impugned before him as being general in nature and therefore, not required to be adjudicated upon. He ought to have appreciated, inter alia, that the assessment order impugned before him had been passed without application of mind and therefore, deserved to be cancelled. 2. In law and in the facts and circumstances of the appellant's case, the learned CIT(A) has grossly erred in upholding dis .....

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any case, it was not open to him to uphold the disallowance without dealing with the appellant's submissions. 3. In law and in the facts and circumstances of the appellant's case, the learned CIT(A) has grossly erred in not ordering cancellation of the levy of interest u/s. 234C prayed for by the appellant vide Ground No. 5 of its appeal. He ought to have appreciated, inter alia, that in the peculiar facts of the appellant's case, the ratio of the decision of the Gujarat High Court .....

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. He ought to have appreciated, inter alia, that in the facts and circumstances of the appellant's case, initiation of penalty proceedings for concealment of income was not at all warranted and that, therefore, he ought to have ordered for the cancellation of those proceedings, thereby saving the appellant as well as the Department from having to undergo avoidable litigation. 5. The appellant craves leave to add, amend and/or alter the ground or grounds of appeal either before or at the time .....

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this, the assessee filed an appeal before the ld.CIT(A), who after considering the submissions rejected the ground against the disallowance of travelling expenses. Aggrieved by the order of the ld.CIT(A), the assessee is now in appeal before us. 3. The ld.counsel for the assessee submitted that both the authorities below have failed to take note of the fact that the assessee has demonstrated the business nexus in respect of the expenditure incurred. The ld.counsel for the assessee drew out atte .....

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onally. The executives of assessee-company travelled from one place to another for the purpose of the business. It was pointed out that such expenses had direct nexus with business of the assessee-company. 3.1. On the other hand, ld.Sr.DR supported the orders of the authorities below and submitted that it was incumbent upon the assessee-company to demonstrate the expenditure had been incurred for the business purposes. In the absence of any supporting evidence, the authorities below were justifi .....

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the same. Appellant argued that it was business expense and spent for the purpose of business however no specific details of purpose of these travelling expenses and their business nexus were submitted. Considering the fact that appellant did not discharge its onus of establishing the claim of expense for the purpose of business, the same is not allowable. Accordingly the disallowance made by the assessing officer is confirmed. 4.1. However, we find that before the ld.CIT(A), the assessee had ma .....

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l and meet various people around the country and globe for entering into prospective trading business. Appellant submits that trading in LNG is very niche aspect; as such there are no direct consumers for the LNG. Further there is a huge demand of energy and power sources on account of scarcity of sources of energy and fuels. To cap such demand the appellant has to keep track of market demand nationally and internationally. Considering such an intensive marketing scenario the travelling expenses .....

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proceedings. The travelling expenses are allowable under section 37 of the act as they are not expressly allowed under section 30 to 36 of the act, neither they are in the nature of capital transactions nor they are personal in nature further they are related to business carried on by the assessee and are incurred wholly and exclusively for the purpose of business. Hence all the criteria laid down in under section 37 of the act are met and accordingly they may be allowed. Further the department .....

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he expenditure, namely whether the amount claimed as deduction was factually expended or laid out and whether it was wholly and exclusively for the purpose of the business. The apex court in various milestone decisions of CIT v. Malayalam Plantations Ltd. [1964] 53 ITR 140 (SC), Madhav Prasad Jatia v. CIT [1979] 118 ITR 200 (SC), CIT v. Birla Cotton Spg. &_Wvg.Mills Ltd. [1971] 82 ITR 166(S.C) held that the expression for the purpose of business is wider in scope than the expression 'for .....

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ax Act, 1961 ('the Act') the travelling expenses have been disallowed. In light of the above facts, judicial precedents the appellant prays your good office to direct the Ld.AO to delete the addition made by disallowing transportation expenses of ₹ 9,90,879/-. 4.2. We also find that the ld.CIT(A) has not adverted to the submissions of the assessee. The assessee had specifically submitted that the expenditure have been incurred on travelling of the executives for the business purpos .....

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