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2016 (5) TMI 532 - ITAT MUMBAI

2016 (5) TMI 532 - ITAT MUMBAI - TMI - Disallowance of business associate's Foreign Travelling Expenses - Held that:- We have noticed that although the ld. AR has argued at length in order to support this issue, but there is no documentary evidence which could support the claim of the assessee that his wife has actually assisted him throughout these trips in any of his business activity. The assessee has not placed on record any documentary evidence which can connect the wife of the assessee wit .....

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rect the AO to delete the additions - Decided against revenue - I.T.A. No. 6458/Mum/2013 - Dated:- 6-4-2016 - SHRI B.R. BASKARAN, AM AND SHRI SANDEEP GOSAIN, JM For The Appellant : Shri Pramod K. Parida For The Respondent : Shri Uday K. Jakke ORDER Per Sandeep Gosain, J. M.: The Present Appeal has been filed by the assessee against the order of Commissioner of Income Tax (Appeals)- 9, dated 13.09.2013 whereby CIT(A) has partly allowed the appeal filed by the assessee against the order of AO date .....

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foreign travelling expenses is uncalled for and the same may be deleted. ii) The Id. CIT(A) further erred by inferring that the foreign visit of Mrs. Laila Lamba was only to take care of her childrens without appreciating that she is a technical person with rich experience and all her childrens are major; therefore, the disallowance on doubts and surmises is not justified and the same may be deleted. iii) The Id. CIT(A) ought to have appreciated that all foreign travelling and related expenses .....

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travelling in respect of all earlier years had been allowed by the Revenue; therefore, on the principle of consistency, the present year's expenses as exclusively incurred for the purpose of Appellant's business should have been allowed. 2. Addition u/s. 41(1) - ₹ 1,60,306/- i) The Id. CIT(A) erred in confirming the addition u/s. 41 (1) without appreciating that age of the clients' running account balance is not the sole criteria to confirm the addition since the trade advances .....

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of Penal Interests The Appellant, on merits, denies his liability to penal interest. 4. The Appellant craves leave to add, amend or alter all or any of the above Ground of Appeal. 2. The brief facts of the case are that the assessee is the proprietor of M/s. Dolphin Exports which is engaged in the business of manufacturing of furniture. The assessee is mainly exporting the furniture and also derives income from agriculture. The return of income declaring total income of ₹ 5,45,189/-includi .....

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from that foreign travelling expenses amounting to ₹ 19,28,230/- were also disallowed and added to the total income of the assessee. 3. Aggrieved by the order of the AO, assessee filed an appeal before the CIT(A) and the CIT(A) partly allowed the appeal filed by the assessee but sustained both the additions mentioned above. 4. Aggrieved by the order of the CIT(A) the assessee filed the present appeal before us on the grounds mentioned herein above. Ground No. 1 5. This ground relates to di .....

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(A) has held that it can be reasonable accepted fact that while going on foreign trips to various countries along with the entire family, the assessee would also try to boost his business activities in the places which are visited by him along with family during the foreign trips. But the expenses incurred by wife Mrs. Laila Lamba on account of foreign trips was rejected by the AO and upheld by the CIT(A) on the ground that during such foreign trips, the children of the appellant were also accom .....

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is held to be incurred not for the purpose of business and therefore disallowed the same and consequently added to the total income of the assessee. Ld. CIT(A) also considered the said issue and after considering documents placed on record upheld the orders passed by AO. We have noticed that although the ld. AR has argued at length in order to support this issue, but there is no documentary evidence which could support the claim of the assessee that his wife has actually assisted him throughout .....

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erefore, we dismiss this ground of appeal raised by assessee. Ground No. 2 7. This ground relates to additions made by AO and confirmed by CIT(A) u/s 41(1) of the I.T. Act. We have heard the counsels for both the parties and we have also perused the documents placed on record and the orders passed by revenue authorities. We have noticed that the AO has suo motto treated the outstanding balance of ₹ 1,60,306/- as cessation of liabilities u/s 41(1) of I.T. Act. Since the same has been found .....

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advance paid by them would be adjusted latter on at the time of actual sales. Ld. AR also relied upon the judgements which are cited below: (2011) 141 TTJ 248 (Del) Dy. CIT Vs. Hotel Excelsior Ltd. Merely because accounts has become non-operational for a period of 3 years, it does not mean that outstanding liabilities of Assessee has ceased to exist, more so when Assesee had not written off such liabilities in his P & L A/c. Merely because the outstanding are appearing in the accounts for se .....

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