TaxTMI 
TaxTMI 
2024 (3) TMI 534
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....d to consider the fact that the travelling done during the year is a Business Decision, taken by the Board of Directors and key managerial persons to expand the business which results in continuous increment in the Turnover. 2. Also the Appellant is Japanese company who infused a FDI of Rs. 13,00,00,000 in India. On one hand India supports make in India & Work in India & offer many ways for ease of doing business, but the Income Tax Department is harassing the appellant in the very first year with invalid grounds. 3. That on the facts and in the circumstances of the case, the learned CIT(A) erred in ignoring the fact that the Appellant company is a wholly owned subsidiary of a Japanese Parent Company and foreign nationals ....
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....bject year is the year of incorporation of the Appellant company, and it is only natural that substantial travelling expenses are to be incurred in the initial years to set up the business and establish connections with suppliers, agents and customers." 3. There is a delay of 279 days in filing the present Appeal. The assessee filed an application for condonation of the delay contending that the time limit for filing the Appeal before the Tribunal was up to 28/01/2023 and the assessee made payment of Court Fee on 20/01/2023 and filed Appeal in online on 24/01/2023 in Form No. 36. The assessee enquired the status in the registry of the Tribunal on 30/10/2023 and came to know that the Appeal filed by the assessee did not get registered as ....
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....isite information regarding travelling was not provided. The appellant submitted that eight new companies were added in the next F.Y. relevant to A.Y. 2017-18. However, details of communication, meetings and other information as required by the AO with these companies were not provided to establish that appellant's claim of addition of these clients and consequent increase in sale in next year have resulted from these travels. The Counsel of the appellant submitted that these companies are located in Gurugram, Delhi and Manesar. Hence, the AO observed that since these companies are located in nearby areas, foreign and other domestic travels were not required. The AO has further observed that as per Appointment agreements with t....
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....total income of the appellant." 6. Aggrieved by the above additions made by the A.O., the assessee preferred an Appeal before the CIT(A). The Ld. CIT(A) vide order dated 29/11/2022, confirmed the additions made by the CIT(A), but corrected the computation error made by the A.O., and restricted the disallowance of 30% to total expenses claimed of Rs. 46,86,526/-. Aggrieved by the order of the Ld. CIT(A), assessee preferred the present Appeal on the grounds mentioned above. 7. The solitary issue involved in the present appeal is regarding 30% ad-hoc disallowance of travelling expenses being car charges of Rs. 15,10,854/-, foreign travelling expenses of Rs. 8,43,895/- and domestic travelling expenses of Rs. 23,31,777/- totaling to Rs. 46....
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.... on 16/10/2015 which is mainly into trading of electrical materials, general electronic parts, semiconductors and electric and non-electronic auto components to/from Japan, India and internationally. It has been noticed by the A.O. that in the P & L Account of the assessee, the assessee booked car charges of Rs. 15,10,854/-, foreign traveling of Rs. 8,43,895/- and domestic traveling of Rs. 23,31,777/-. The assessee was asked to give ledger copies of the expenses with name, employee number, date of travelling, name and business purpose of traveling and sought for names and address of the person with whom meeting was proposed, copies of correspondence regarding fixing of meetings, minutes of meetings, consequent effect on sale and further dea....
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....da of the meetings and other relevant details corroborating the business purposes of the travelling and car hire charges. 12. The Hon'ble Supreme Court in the case of CIT Vs. Delhi Safe Deposit Co. Ltd. (1982) 133 ITR 756 (SC) held that the true test of an expenditure laid out wholly and exclusively for the purposes of business is that it is incurred by the assessee as incidental to his trade for the purpose of keeping the trade going. The expenditure incurred must be for commercial expediency. In the circumstances, the Ld. A.O. has been totally wrong in considering the fact that the discharge of the burden has to be effective and meaningful and not to cover up merely by book entries and paper work. 13. The Jurisdictional High court i....