2014 (7) TMI 1101

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....p;   "1. The ld.CIT(A) has erred in law and on facts in confirming disallowance of Rs. 28,48,709/- made by AO on account of Research & Development expenses. The disallowance made by AO and confirmed by the ld.CIT(A) is wholly unsustainable in law and on facts especially when the appellant (DSIR approved R&D unit) has established the genuineness of such expenses for the purpose of developing new products for the export market. The disallowance of genuine business expenditure without any merits and justification requires to be allowed and order of ld.CIT(A) ought to be quashed." 3. The learned counsel for the assessee submitted that the ITAT, Ahmedabad Bench in assessee's own case for the immediate preceding assessment year 2004-....

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....or business purpose should have been allowed as allowable deduction to the assessee. The learned DR submitted that the assessee could not prove any business purpose for the foreign traveling expenses disallowed by the AO and confirmed by the CIT(A) and even in Annexure-II filed by the assessee, the column "benefit derived" has not been answered. 7. We have considered rival submissions and perused the orders of the AO and the CIT(A) and various details of foreign traveling expenses filed by the assessee in the compilation before us. We find that the assessee could not prove the business purpose of the said expenditure on foreign travel. In Annexure-II copy filed at page no.129 of the compilation before us, the last column "benefit derived....

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....s as under:     "1. The ld.CIT(A) has erred in law and on facts in directing to allow the expenses of Rs. 30,168/- disallowed by AO u/s.40(a)(ia) of the Act in the subsequent year without appreciating the fact that tax was deducted at source and deposited by the appellant from the impugned payment before due date of filing of return. Both the lower authorities failed to take cognizance of the amendment brought by Finance Act, 2010 that is held to be retrospective in nature allowing additional time to the appellant for deposit of TDS before due date of filing of return. Ld.CIT(A) ought to have deleted the disallowance rather than directing AO to allow the expenses in the subsequent year." 9. The learned counsel for the a....