Foreign travel expenditure on visit to trade fair with tourist visa . ITAT restricted disallowance to 50 per cent in view of connecting nature of business of the assessee
ABCAUS Case Law Citation:
ABCAUS 3027 (2019) (06) ITAT
The instant appeal filed by the assessee was directed against the order of CIT(A) in confirming the disallowance made by the Assessing Officer (AO) with respect to the claim for foreign travelling expenses.
The assessee was carrying on the business of trading in plywood. The assessee had claimed business expenditure on account of foreign travel on account of visit to trade fair in Germany.
It was explained by the assessee before the Assessing Officer (AO) that the said trade fair was for machines and tools used, inter alia, in carpentry and furniture industry. It was also submitted that visit to the said trade fair gave the assessee an opportunity to explore and expand international contacts.
The AO did not find merit in this explanation of the assessee. According to him, the assessee was not either an exporter or a manufacturer who required to visit the trade fair of machines and tools.
The AO also found that the assessee had gone to Germany with a tourist visa and had also stayed one full day and night at Dubai on both up and down journey.
He, therefore, held that the foreign travelling expenses claimed by the assessee were not for the purpose of its business and made disallowance of the same.
On appeal, the CIT(A) confirmed the said disallowance.
The Tribunal observed that even though there were certain deficiencies in the claim made by the assessee for foreign travel expenses in as much as he had gone to Germany on a tourist visa and had also taken halt in Dubai, the fact remained that the trade fair/exhibition visited by him was the exhibition of machines and tools used, inter alia, in carpentry and furniture industry.
The Tribunal opined that since the assessee was carrying on the business of trading in plywood, his participation in the fair/exhibition in Germany could not be entirely treated as for non-business purpose.
The Tribunal opined that to restrict the disallowance to 50% would be fair and reasonable and directed accordingly.
Addition u/s 68 for jewellery purportedly received on death of grandparent under Will upheld. In a recent judgment, ITAT upheld…
Supreme Court lays down tests to determine whether a debt is a financial debt or an operational debt under IBC…
Merely because directors of two companies were common not mean that deposits received was bogus and companies were shell companies…
Application though named as rectification but if tax imposed is not legitimate then it also touches upon the merit –…
Cost of acquisition as on 01.04.1981 taken as per valuer report by reverse indexing of current FMV to be further…
ITAT directed AO to serve notice of hearing both through electronic and physical mode upon the assessee In a recent…