2018 (4) TMI 246

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....re that Assessee Company is engaged in the business of marketing and selling of chemicals manufactured by its principal company, M/s. Henkel CA and also derived income from operations of wind energy project. During the course of the assessment proceedings, the AO noted that out of the amount of Rs. 48,41,277/- debited under the head travelling and conveyance expenses, sum of Rs. 9,45,841/- has been incurred on London visit by the Directors, Shri Inder Lal Oberoi and Smt. Asha Oberoi. In response to the show cause notice, the assessee had submitted and stated as under:- "Details of foreign travelling in the format as called for is attached. During the foreign travelling, meetings were held with the customers and orders worth USD 340206.20....

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....lhi and NCR region and also filed copy of such agreements. A brief write up of a new business and also the copies of invoices of expenses incurred in foreign travel was also filed. It was further submitted that the company has earned sum of Rs. 54,194/- out of the 'referral fee' from the new business which has been offered to tax under the head 'miscellaneous income'. However, Ld. CIT(A) confirmed the action of the AO on the ground that the assessee has failed to give any purpose and any kind of evidence for undertaking the visit by the Directors to London and also similar disallowances were made in assessment year 2011-12 which has been accepted by the assessee. 5. Before us the Ld. Counsel for the assessee submitted that, prior to the ....

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.... the purpose of visit in London. Whatever minor income has been shown in this year from the referral patient, they are from Nigeria which is an underdeveloped/ developing country and why a patient from would from London will come to India for medical treatment. In any case, the assessee has not been able to substantiate or prove its commercial expediency by adducing any evidence. He further pointed out that in the next year the assessee has permanently closed down this new venture. Even under the principle of commercial expediency, the onus was heavily upon the assessee to prove the genuineness of the expenditure and also whether it was the purpose of business or not. Thus, order of the Ld. CIT (A) should be affirmed. 7. We have heard th....