2002 (11) TMI 736

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....mpany, which was disallowed by the Assessing Officer by considering these expenses incurred not for the purposes of the business. (b) The CIT(A) has also erred in holding that the expenses incurred on account of foreign travel are covered by Rule 6D(1) of the Income-tax Rules, 1962 as foreign visit of the Director has not resulted in trade transactions of any kind with the countries visited by him. (c) He has also failed to appreciate that the assessee failed to furnish any documentary evidence of either boarding/lodging abroad or minutes of business meetings authorising the foreign travel of the Director or concrete evidence regarding meetings held with the foreign companies for business purposes during the course of his foreign visi....

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.... and its counsel appeared and filed explanations to the questionnairs alongwith the books of account which were examined by the Assessing Officer. The assessee derives income from manufacturing of hosiery goods and also did job work for its sister companies. During the assessment proceedings, it was observed by the Assessing Officer that the assessee has debited Rs. 208,025 on account of foreign travel expenditure of Shri Rahul Oswal to France, Switzerland, U.K. The assessee-company has been doing fabrication work for domestic market. Till date, no foreign exports has been carried on by the assessee. The expenditure incurred on foreign tour by the Director for assessment year 1995-96 related to the air ticket fare for Rs. 1,04,810, value....

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....s market. The visit was as per the directions of the company. The visit was with a view to export hosiery goods to European countries. The expenditure incurred on air ticket fare, value of foreign currency incurred was a matter of record which was submitted before the Assessing Officer. The tour was undertaken by the Director of the assessee-company to U.K., France, Switzerland to study the export market and as such, the tour was fully for business purposes and in the interest of the assessee-company. Ld. AR for the assessee relied on the CBDT Circular No. 4(C) issued vide No. 27(3)-IT(50) dated 19-6-1950. 2.6 We have heard both the parties and perused the records. It is observed that the tour undertaken by the Director of the assessee-c....