TaxTMI 
TaxTMI 
2012 (7) TMI 478
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....case the action of the Ld. CIT(A) in upholding the addition of Rs. 391477/- representing the expenses incurred by the appellant on its foreign visit on business visa to Melbourne is arbitrary and unjust and perverse. The impugned addition sustained deserves to be deleted. 3. In this case AO noted that assessee has claimed business promotion expenses at Rs. 4,14,107/- which includes foreign travelling expenses of Rs. 3,91,477/- in respect of tour to Australia by the assessee. On query from the AO in this regard assessee submitted as under:- "That assessee is dealing in deployment of skilled and semi skilled person and he has learned with authenticate resources skilled category of people such as welder, electrician, painter, denter, was....
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....rting a new business entity in Australia, it cannot be allowed u/s. 37(1). Accordingly, he confirmed the disallowance made by the AO. 5. Against the above order the assessee is in appeal before us. 6. We have heard the rival contentions in light of the material produced and precedents relied upon. Ld. Counsel of the assessee has given written submissions as under:- "The appellant proceeded on a Business visa to Melbourne in order to expand its existing business of placement agency by setting up its branch overseas. The appellant not being a citizen of Australia was obliged to form Australian Company for getting CAN which is the statutory immigration requirement for doing business in Australia. The company named Jeevan Enterprise....
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....setting up such a unit of existing business is admissible business expenditure. i) CIT vs. Modi Industries Ltd. 200 ITR 341 Delhi High Court. ii) Empire Jute Co. Ltd. 124 ITR 1 SC. iii) CIT vs. Relaxo Foot Wear Ltd. 293 ITR 241 Delhi High Court. iv) Karam Chand Prem Chand (Pvt.) Ltd. Vs. CIT 137 ITR 209 Gujarat. v) Hindustan Machine Tool vs. CIT 176 ITR 216. vi) Jay Engg. Works vs. CIT 311 ITR 406 Delhi High Court. Case laws relied upon by the Ld. CIT(A). i) The case laws are distinguishable on facts in the case of CIT vs. Floor and Food Ltd. Reported in 170 ITR 469, travelling expenses of the Managing Director and Chief Executive office who was sent to foreign country was disallowed being of capital nature. Fore....
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....omplete unity of control and there was common fund which was most relevant for testing whether business was the same. The new unit at Melbourne was part of its existing business in India. The business activities of its Australian company was on the same lines as here in India. In this regard, we find that neither the AO nor CIT(A) have mentioned that there was any variance in the nature of business of the assessee in India and Australia. The expenditure incurred had direct nexus with the existing business carried by the assessee in India. The opening of its new unit was supplement to the existing business in India. The assessee has submitted that the test laid down by the Apex court and the principles laid in the judgements of various High ....