Court allows appeal after delay, deletes additions under Income Tax Act, upholds investments, overturns disallowed expenses.

The court condoned the delay in filing and re-filing the appeal, allowing it to proceed. The additions made under Section 68 of the Income Tax Act for the Assessment Year 2012-13 were deleted by the CIT(A) and upheld by the Tribunal. The court found the investments in line with RBI guidelines and dismissed the appellant's arguments regarding the genuineness of the investments. Additionally, the disallowance of travelling expenses was overturned as the expenses were deemed to have a business nexus. The appeal was closed with no substantial question of law for consideration.

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Issues Involved:
1. Condonation of delay in filing and re-filing the appeal.
2. Additions under Section 68 of the Income Tax Act, 1961.
3. Disallowance of travelling expenses.

Condonation of Delay:

1. The appellant/revenue sought condonation of a delay of 5 days in filing and 347 days in re-filing the appeal.

2. The delay in filing was short, but the delay in re-filing was substantial.

3. The respondent/assessee contested the reasons for the delay in re-filing, stating they were inaccurate and no administrative approval was required.

4. Despite the discrepancies, the court condoned the delay to address the appeal on its merits.

5. Consequently, the delay in filing and re-filing the appeal was condoned, and the applications were disposed of.

Additions under Section 68:

7. The appeal concerned the Assessment Year (AY) 2012-13, where the AO made additions of Rs. 16,67,89,253/- under Section 68 of the Act and disallowed Rs. 8,30,748/- of travelling expenses.

9. The CIT(A) deleted these additions, and the Tribunal upheld this decision, leading to the current appeal under Section 260A of the Act.

10. The main addition involved an investment by Blue Bay Hospitality Pvt. Ltd. (BBHL), a Mauritius-based company, which was issued shares at a premium.

11. The appellant/revenue argued that BBHL's investment was not genuine, questioning the creditworthiness of the source of the source, Mr. Joseph Thomas, a UAE resident.

15. The court noted that BBHL's investment was in line with RBI guidelines, and the creditworthiness was demonstrated by the funds sourced from Mr. Joseph Thomas.

18. The respondent/assessee provided relevant material, including RBI permission and the methodology for calculating the premium.

20. The court found that the domestic investors were promotor directors, explaining the difference in share prices.

20.1 The court rejected the appellant/revenue's argument about further demonstrating the creditworthiness of the source of the source, as the law requiring this was effective from 01.04.2013, post the relevant AY.

21. The court concluded that the appellant/revenue failed to provide material indicating round-tripping, validating the deletion of the addition by CIT(A) and the Tribunal.

Disallowance of Travelling Expenses:

22. The AO disallowed 70% of the travelling expenses amounting to Rs. 8,30,748/-, deeming them personal.

23. The CIT(A) examined the invoices and material, concluding that the expenses were business-related, and the AO had no evidence to prove otherwise.

24. The court agreed with the CIT(A) and the Tribunal that the expenses had a business nexus.

25. The appellant/revenue did not propose any question of law suggesting the findings were perverse.

26. The court found no substantial question of law for consideration and upheld the Tribunal's order.

27. The appeal was accordingly closed.

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