TMI Blog2016 (8) TMI 470X X X X Extracts X X X X X X X X Extracts X X X X ..... sity of her presence in India and execution of the various documents related to sale of the property have not been disputed by the lower authorities. It is thus seen that the appellant has proved the direct linkage/nexus between her travel to India and the corresponding travel expenditure with the transfer of the property, capital gains arising out of which has been duly offered to tax. We accordingly delete the disallowance of the travelling expenditure of ₹ 850,000 and hold the same as an allowable deduction under section 48(i) of the Act. - Decided in favour of assessee. - ITA Nos. 809/JP/2012 - - - Dated:- 17-6-2016 - SHRI VIKRAM SINGH YADAV, AM SHRI LALIET KUMAR, JM For The Assessee bys by : Shri P.P. Pareek (CA) For The Revenue : Ms Roshanta Kumari Meena (JCIT) ORDER PER SHRI VIKRAM SINGH YADAV, A.M. The appeal filed by the assessee is arising from the order dated 21.08.2012 passed by the learned CIT (A)-I, Jaipur for the A.Y. 2009-10. The assessee has raised the following ground of appeal:- That the ld. Assessing Officer has erred in law as well as in facts by disallowing travelling expenditure incurred by the assessee, who is a nonresident and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee submitted that Appellant has claimed travelling expenditure u/s 48(i) of the Income Tax Act, 1961 which reads as under: 48. The income chargeable under the head Capital gains shall be computed, by deducting from the full value of the consideration received or accruing as a result of the transfer of the capital asset the following amounts, namely:- i) Expenditure incurred wholly and exclusively in connection with such transfer, ii) The cost of acquisition of the asset and the cost of any improvement thereto . The ld. A/R submitted that the section does not say that which particular expenses are allowable or not allowable. However, it stipulates that any amount which is expenditure in nature and have incurred wholly and exclusively in connection with such transfer can be deducted from the consideration for the purpose of calculation of capital gain. Therefore, it is very much clear that travelling expenses per se is not disallowable, it can only be disallowed, if it is not wholly and exclusively in connection with such transfer. Under the facts and circumstances and the legal provisions discussed hereinbefore the finding of the Ld. AO to the extent that suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elieving that the burden of meetings with the prospective buyers was not on the shoulders of the Assessee. Thus, the belief of the CIT(A) is solely based on her own surmises. In this regard, the ld. A/R placed reliance on the decision in the matter of Deputy Commissioner of Income Tax vs. Sophisticated Marbles Granite Industries (2010) 3 ITR (Trib) 220 (Del), wherein it was held that The business interest is well understood by the assessee and the AO cannot step into the shoes of the businessman so as to determine how the business is to be conducted. 4.3 The LR AR further submitted that regarding Ld. CIT(A) raising the question about the travelling between Delhi to Mumbai and Delhi to Jaipur, such transaction are not getting completed in single slot of hours or days, it requires lot of deliberations, consultations, efforts to complete stipulations, gathering of documents, dealing with different government departments to fulfill the conditions of the prospective buyers, etc. in the instant case, Appellant is permanently living at Japan. As far as travelling to Jaipur is concerned, some time she has to come to consult her Advisors based at Jaipur and sometime once she came to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contentions and perused the material available on record. The issue under consideration relates to whether travelling expenditure is an allowable deduction u/s 48(i) of the Act while computing capital gains in connection with transfer of property. What can be deducted under section 48 is expenditure incurred wholly and exclusively in connection with the transfer contemplated under Section 45 of the Act. The provisions nowhere specifiy what kind of expenditure or the specified nature of the expenditure which shall be allowed as a permissible deduction while computing the capital gains. All it provides is that the expenditure so incurred, should have been incurred wholly and exclusively in connection with the transfer of the property. The words in connection with such transfer are occurring in the provisions means that the expenditure is intrinsically related to the transfer of the property. In other words, the assessee has to establish a nexus between incurring of the expenditure and the transfer of the property. 4.8 The lower authorities have relied on the decision of High Court of Mysore in case of B.N. Pinto vs CIT (96 ITR 306). In that case, the assessee executed a release ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at there was no evidence produced for payment of lawyer s fees in connection with the transfer of order of any travelling expenditure genuinely incurred in connection with the transfer, it was held that the expenditure would not qualify as a permissible deduction. Similarly in case of Shah Roop Narain the Hon ble High Court of Rajasthan has held that no question of law arises out of the order of the Tribunal which has confirmed the disallowance of travelling expenses in absence of proof of incurrence of such expenditure in connection with the transfer. 4.10 The principle that emerges is that there is no restriction on the nature of expenditure that can be claimed as a permissible deduction under section 48(i) of the Act. At the same time, the expenditure so incurred, should have been incurred wholly and exclusively in connection with the transfer. In other words, the expenditure should be intimately connected with the transfer and the appellant has to establish the necessary nexus between the incurring of the expenditure and the transfer of the property. In the instant case, we therefore agree with the contention of the learned AR that travelling expenditure is per se not a disa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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