ITAT Delhi: Appeal allowed for statistical purposes on foreign travel expenses & professional fees.

The Appellate Tribunal ITAT Delhi allowed the appeal for statistical purposes in both issues. The disallowance of foreign travel expenses was partially upheld, with the Tribunal directing the AO to estimate the expenses after the assessee provides a breakdown. Similarly, the disallowance of professional fees paid to the Director's brother was also restored to the AO for consideration based on a new agreement submitted by the assessee. The Tribunal emphasized the importance of providing necessary details and following precedents in making decisions.

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Issues:
1. Disallowance of foreign travel expenses.
2. Disallowance of professional fees paid.

Analysis:

Issue 1 - Disallowance of Foreign Travel Expenses:
The assessee, a management consultancy company, filed an appeal against the disallowance of foreign travel expenses amounting to Rs. 1,93,000 for the assessment year 2007-08. The CIT(A) partly allowed the appeal but confirmed the disallowance. The Tribunal referred to a similar case for A.Y. 2009-10 where the business purpose of the foreign trip was accepted, and expenses were allowed to an extent after estimation. Following this precedent, the Tribunal restored the issue to the AO for estimation after the assessee provides a breakdown of the expenses claimed. The Tribunal emphasized that in the absence of details, estimation is necessary, and directed the AO to allow necessary relief based on the business purpose accepted by the Revenue.

Issue 2 - Disallowance of Professional Fees Paid:
Regarding the disallowance of professional fees paid to Mr. Sagnik Goswami, the brother of the Director of the assessee company, the Tribunal noted a similar issue in A.Y. 2009-10. In that case, an agreement with Mr. Sagnik Goswami was considered crucial, and the issue was restored to the AO for a decision considering the agreement. In the current case, as the assessee had not filed the agreement before lower revenue authorities, a new agreement dated 17th October, 2006 was admitted. Following the precedent, the Tribunal restored this issue to the AO for consideration of the contract and agreement, directing a decision in accordance with the law after providing the assessee with a reasonable opportunity to be heard.

In conclusion, the appeal was allowed for statistical purposes in both issues, and the order was pronounced on 16/05/2014 by the Appellate Tribunal ITAT Delhi.

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