Case Law Details
Balkrishna Live Stock Breeders Pvt. Ltd. Vs ACIT (ITAT Bangalore)
Held that foreign travel directly relating to securing the capital investment in the assessee’s business is capital in nature. Accordingly, such expenditure is not allowable expenditure u/s 30 to 38 as expenditure is not laid down wholly and exclusively for day to day operation of the assessee’s business.
Facts-
During the course of scrutiny, the assessee was served with a show cause notice proposing among other things to disallow the foreign travel expenses. The company had been looking to expand / explore opportunities outside country especially in Middle East since their operations in India are restricted by their franchise agreement. The travel cost was primarily incurred for travel to Middle East and a few poultry seminars held outside the country. The assessee has claimed the initial expenditure on travel for exploration of new markets and business opportunities outside the country as a legitimate expenditure of the Company expended wholly and exclusively for the purpose of business which are admissible u/s 37(1) of the Income-tax Act,1961.
Conclusion-
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