TMI Blog2017 (6) TMI 453X X X X Extracts X X X X X X X X Extracts X X X X ..... in which it is clarified that Board has sent the assessee to foreign trip for business purposes and all the expenditure are borne by the company. It is also certified that assessee was a non-employee director and share holder in the company and no salary or director’s fees was paid to her by the company during the year under consideration. These evidences on record clearly prove that assessee undertaken foreign visits for the purpose of business of company and is not a perquisite within the meaning of section 17(2)(iii) of the I.T. Act. Further the authorities below made addition of ₹ 3 lacs in respect of foreign visit undertaken by assessee on 1st July, 2011. Ld. Counsel for assessee referred to PB 62 which is certificate of foreign ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ertaking such visits. The assessee could not produce any correspondence/work contract or invitation letter from the countries which could justify her claim that these visits were undertaken for the purpose of business and hence should be allowed as a business expense. The AO also found that the expenditure for the foreign visits was borne by M/s. Design Development India (Pvt.) Ltd., a company where assessee was a director. The AO thus disallowed the expense claimed of ₹ 5 lacs u/s 17(2)(iii) on account of unexplained perks. Similarly AO noted that assessee has also undertaken foreign visit on 1st July, 2012, details of which have not been furnished by the assessee. The assessee simply explained that she had undertaken journey with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... doing earlier. No travel expenses have been disallowed earlier. The foreign trip travel expenditure of the assessee were borne by M/s. Design Development India Pvt. Ltd. and such expenditure have been accepted by the AO u/s 153A dated 29th February, 2016. Therefore, no part of such expenditure can be considered to be a perk in the hands of assessee. Section 17(2)(iii) as invoked by the AO is not applicable to the facts of the case. No foreign travel expenditure have been claimed in the hands of the assessee because same have been incurred by the company. Therefore, both the additions are liable to be deleted. 5. Ld. CIT(A) noted that assessee has not given any evidence like project report and other documents to show that she was doing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and submitted that in the order of the company the facts have not been discussed and that travel of 1st July, 2011 do not match with foreign journey undertaken by the assessee. 7. I have considered rival submissions. The AO made addition of ₹ 5 lacs u/s 17(2)(iii) of the Act on account of unexplained perks. Section 17(2)(iii) of the Act reads as under :- (iii) the value of any benefit or amenity granted or provided free of cost or at concessional rate in any of the following cases (a) by a company to an employee who is a director thereof; (b) by a company to an employee being a person who has a substantial interest in the company ; (c) by any employer (including a company) to an employee to whom the provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rest in company. Therefore, in my view provision of section 17(2)(iii) would not apply in the case of the assessee. Ld. Counsel for assessee relied upon order of the ITAT Delhi Bench in the case of Smt. Shilpa Pasari vs. ITO (supra) in which in para 10 it is held as under :- 10. Apropos assessee s appeal, it has not been disputed that there was no relationship of employer employee between SKCSPL and the assessee. A perquisite u/s 17(2)/17(3) can be added in the hands of the assessee only if the employer employee relationship is established. In the absence thereof, the addition in the hands of assessee u/s 17(2)/17(3) cannot be made. In view thereof, we allow this ground of appeal taken by the assessee. 9. Since the authorities be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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