2020 (11) TMI 852

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.... 1961 ('the Act' hereinafter) dated 28/09/2017 for assessment year (AY) 2015-16. The appeal raises two issues, which we shall take up in seriatim. 2. The first issue concerns the disallowance in the sum of Rs. 1,59,100, being ten percent of the claim in respect of travel expenditure (i.e., Rs. 15.91 lacs) u/s. 37(1) of the Act. Both the disallowance as well as its confirmation in first appeal has been on the basis that the expenditure is not fully supported by proper bills and vouchers and, besides, travel for personal purposes (of the Directors, etc.) could not be ruled out, so that a disallowance, accordingly, at 10% of the claimed sum stands made. 3. We have heard the parties, and perused the material on record. The assessee's c....

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....arly considering that the accounts are audited, as why would a company bear the personal expenditure of any person? The primary burden on the assessee afore-stated is for the reason that only it is in the knowledge of the facts of its' case, and could therefore substantiate/explain the same. But that does not empower the Revenue to impute, without any factual basis, either absence of supporting bills/vouchers or a non-business purpose. It is only when called upon to demonstrate the business purpose of a travel that it could be said that the assessee has, or has not, been able to prove the same, which would, in that case, be a matter of the evidence/s led and explanation/s furnished. Needless to say, no such exercise has been carried out in ....

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..... Why, even expenditure on travel from home to office and back, unless covered by the terms of the employment, would be a personal expense of the person concerned. The Revenue is therefore justified to say that some expenditure on the personal use of the vehicles by the Directors or other employees of the assessee-company cannot be ruled out. No case to the contrary has been stated, much less made out. It is only where the Directors or other staff to whom the company vehicles have been provided are shown to have, as stated, personal vehicles for their own use, and of having incurred expenditure on their running and maintenance, that it could be said, with some degree of objectivity, that no personal purpose could be imputed. Sure, as Sh. Gh....