The Income Tax Appellate Tribunal (ITAT), Delhi bench, while upholding the disallowance of foreign travel expenses, held that the assessee had failed to prove the business expediency of foreign travel expenses incurred for business purposes.
The assessee, M M Creations, filed the appeal before the tribunal against the order of CIT(A) disallowing the expenditure incurred on foreign travel by the employees and partners for business purposes outside India.
During the proceedings, Kapil Goel, counsel for the assessee, argued that the assessee is an exporter and had to travel abroad to exhibit the products exported, where orders are received for conducting the business of the assessee in the impugned year. The assessee also produced all documentary evidence of traveling expenses and exhibitions outside India for business purposes.
Smita Singh, counsel for the Revenue, submitted that the assessee was to ask for commercial expediency of the foreign travel, as all the travelers were family members of partners, but the assessee did not file any reply in this regard and thus failed to prove business expediency.
The tribunal observed that the assessee failed to prove the business expediency of the foreign trip to Europe; therefore, the primary onus has not been discharged by the appellant either during the assessment or during the appellate proceedings.
After reviewing the facts and records, the two-member bench of Dr. B.R.R. Kumar (Accountant Member) and Chandra Mohan Garg (Judicial Member) held that the assessee had failed to prove the business expediency of foreign travel expenses incurred for business purposes. Therefore, the bench dismissed the above ground raised by the assessee.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
