Foreign Business Tour by Non-Employee Director/Shareholder of Company not taxable as Perquisite

This appeal by assessee has been directed against the order of Ld. CIT(A) -35, New Delhi dated 30^th January, 2017 for assessment year 2012-13 on the following grounds :-

1. “That the Ld. CIT(A) had erred on facts and under the law in confirming the addition of Rs. 5,00,000/- on account unexplained perks u/s 17(2)(iii) of I.T. Act as made by the AO.

2. That the Ld. CIT(A) had erred on facts and under the law in confirming the addition of Rs. 3,00,000/- on account of unexplained expenditure incurred on foreign travels as made by the AO.

3. That without prejudice to Ground No. 1 & 2 above, the additions as made by the AO and confirmed Ld. CIT(A) are very excessive.”

2. Briefly the facts of the case are that during assessment proceedings, the AO observed that in the relevant year the assessee had undertaken foreign travel tour to UAE, Singapore etc. however she could not furnish the reasons/ purpose for undertaking such visits. The assessee could not produce any correspondence/work contract or invitation letter from the countries which could justify her claim that these visits were undertaken for the purpose of business and hence should be allowed as a business expense. The AO also found that the expenditure for the foreign visits was borne by M/s. Design & Development India (Pvt.) Ltd., a company where assessee was a The AO thus disallowed the expense claimed of Rs. 5 lacs u/s 17(2)(iii) on account of unexplained perks. Similarly AO noted that assessee has also undertaken foreign visit on 1^st July, 2012, details of which have not been furnished by the assessee. The assessee simply explained that she had undertaken journey with her husband and expenditure has been borne by her husband. The AO, therefore, disallowed estimated expenditure u/s 69C at Rs. 3 lacs and added to the income of the assessee.3. The assessee submitted additional evidences before Ld. CIT(A) like copy of Board Resolution of the company etc. To which the AO objected and submitted in the remand report that addition was made for foreign visit to UAE and Singapore because the purpose of visits remained unverified and assessee also stated that expenses are borne by her husband. It was also stated that assessee has not produced any evidence of purpose of visiting foreign country and failed to explain any official purpose. It was also submitted that with regard to addition of Rs. 3 lacs u/s 69C, the passport shows that assessee has undertaken foreign visits on 1^st July, 2011 instead of 1^st July, 2012 mentioned in the assessment order.