The Income Tax Appellate Tribunal (ITAT), Pune Bench deleted the addition as foreign travel expenses incurred by the assessee were genuine and meant for business purposes only.
The assessee, Talera Automobiles Private Limited is engaged in the business of dealership of cars. During the course of assessment proceedings, the Assessing Officer observed that the assessee incurred Foreign Travel expenses to the tune of Rs.9,29,041/-.
On being called upon to justify the deduction, the assessee submitted details that indicated that Smt. Vasumati P. Talera traveled to Switzerland and to the USA along with Smt. Snagda P. Talera. The AO made the disallowance by observing that no evidence was filed showing the business exigency. The CIT(A) confirmed the disallowance.
The coram headed by the Vice President R.S.Sayal noted that the director who traveled to Switzerland and the USA is a widow and took over the reins of the company in the year 2003 after the demise of her husband. The assessee has placed on record a copy of Board Resolution authorizing such foreign travels. Not only that, but the assessee has also filed copies of certain letters written by its director to the dealers which she visited in Switzerland and the USA.
The ITAT ruled that the AO has not brought anything on record to show that either the letters or their contents were not bona fide. Having considered the entire factual scenario obtained in the extant case, the Tribunal was of the considered opinion that the foreign travel expenses incurred by the assessee are genuine and meant for business purposes only. The impugned order is overturned and the addition is deleted.
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