Case Law Details
Ms Mount Shivalik Brewereis Ltd. Vs DCIT (ITAT Chandigarh)
Conclusion: Foreign travelling expenses incurred by assessee-company for its Managing Director (MD) should be allowed as deduction as AO had no basis for holding the expenses incurred on the MD’s trip to Germany as excessive or personal.
Held: AO allowed foreign travelling expenditure incurred by managing director (MD) on his trip to Germany to a certain extent and the balance amount including foreign travelling expenses incurred on the trips undertaken to the UK by its Director was disallowed holding the same to be extravagant and some personal element was involved in the same. It was held no evidence to prove the visit of the MD to breweries in Edinburgh had been filed, nor any other evidence to prove that the trips were undertaken for a business purpose. Therefore, the claim of foreign travelling expenses incurred on the trip undertaken by the MD of the assessee company to the UK was rightly disallowed. However, with regard to expenses incurred for the trip undertaken to Germany, there was no basis either for holding the expenses incurred on the MD’s trip to Germany excessive or personal. AO could not deny the claim of expenditure on whims and fancies, therefore, the denial of the claim of expenditure incurred on the trip of the MD of assessee-company to Germany was unwarranted and uncalled for and the same was directed to be allowed to the assessee
FULL TEXT OF THE ITAT JUDGEMENT
The present appeal has been filed by the assessee against the order of the Commissioner of Income Tax (Appeals)-2, Chandigarh (in short CIT(A) dated 31.12.2014 passed u/s 250(6) of the Income Tax Act, 1961 (in short referred to as ‘Act’).
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