TaxTMI 
TaxTMI 
2011 (8) TMI 478
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....4104 DLF Gurgaon. It has filed its return of income electronically on 31.3.2009 declaring an income of Rs. 2,00,12,041. A search and seizure operation was conducted in this case on 28th September, 2007. On scrutiny of the accounts, it revealed to the Assessing Officer that the assessee had debited a sum of Rs. 7,56,876 towards foreign travel expenses of Smt. Sudha Gupta, chairperson along with certain employees. Assessing Officer has directed the assessee to submit the details exhibiting the nexus of the expenses vis-à-vis the business exigencies of the assessee. The assessee has submitted a detailed reply whereby it has highlighted the over all business objects of the assessee and how it perceived them for future development. According to the assessee, the chairperson visited different countries in order to learn the better management and development of pre-nursery schools. Assessing Officer has rejected the contentions of assessee on the ground that the assessee failed to submit any documentary evidence which can exhibit the meeting of the chairperson with the heads of any institution or any invitation for training etc. He concluded that it is purely a pleasure trip and ex....
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....between the expenses and the object of the assessee for furtherance of its business. The assessee had made elaborate full-fledged submission which only highlights how an individual can improve his understanding or personality by undergoing exchange program or training at different educational institution. There is no dispute about these propositions. But whether, in fact, anybody has gone this training at any foreign institution, there is no demonstrative proof on the record. On the other hand, learned counsel for the assessee relied upon the order of the Learned CIT(Appeals). He drew our attention towards the bills for tickets and other expenses. He also took us through the submissions made by the Learned CIT(Appeals) which have been placed in the paper book. 6. We have considered the rival contentions and gone through the record carefully. In order to claim any expenditure described in sections 30 to 36 and not being in the nature of capital expense or personal expense laid out and has been wholly and exclusively for the purpose of business, one's claim has to be examined under residuary provision of section 37. Hence, in order to be eligible for an expense under this section, o....
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.... confronted the learned counsel to drew our attention to the documentary evidence exhibiting any correspondence entered by the assessee with the institution, where its director, chairperson or other employee went for developing communication skill or training. He was unable to refer a single page in this connection. He made an attempt with the help of bills, vouchers and certain e-mails. We have again clarified him that quantification of the amount is not in dispute, the only dispute relates to how the assessee substantiate that these expenses were incurred for the purpose of the business. We further asked the learned counsel for the assessee to demonstrate the policy of the assessee for sending its employees on foreign training and also show us the list of employees who went for a training irrespective of any relationship with the management in earlier assessment year or subsequent year. He was unable to show any such list. This query was specifically put to him in order to eliminate any doubt that a colour of business expenses has been given to the personal expenses. If the assessee has been sending employees who are not connected by blood relation with the persons controlling th....
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.... on the ground that there was no need to incur such expense. He has not doubted the quantum of expenses vis-à-vis incurred for the purpose of the business or not. In his opinion, it is not necessary for the assessee to incur marketing expenses. Considering the facts and circumstances and finding of the Learned CIT(Appeals) in the light of the proposition, laid down by the Hon'ble High Court in the case of Dalmia Cement (P.) Ltd. (supra), we do not find any merit in this ground of appeal. It is rejected. 10. In the result, the appeal of the revenue is partly allowed. 11. In the cross-objection, assessee has pleaded that Learned CIT(Appeals) has erred in restricting the disallowance out of kitchen expenses at 2%. 12. The brief facts of the case are that assessee had debited a sum of Rs. 35,81,769 under the head "kitchen expenses". Assessing Officer has disallowed the expenses at 5%. The brief finding recorded by the Assessing Officer in paragraph 4 reads as under: "4. It was also noticed that the assessee is claiming heavy amounts of expenditure on account of kitchen expenses i.e., Rs. 3581769. The ledger account of the assessee was called for and examined. It was noticed ....