Travelling Expenses as being incurred wholly and exclusively for the purpose of Business can be allowed as Deduction: ITAT [Read Order]

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has held that the travelling expenses being incurred wholly and exclusively for business can be allowed as a deduction.

M/s. Express Industrial Services Pvt. Ltd, the assessee company is engaged in the business of providing management consultancy services for activities in connection with the procurement and sourcing of natural/mineral resources and in the trading business of bullion more specifically gold.

During the year, the assessee was exploring the business opportunities of farming various types of plantations like Eucalyptus, Olive, Pomegranates and Orchards. The same required huge finance and the management thought and the assessee company had to raise funds from proper investors in the international market which necessitated visits to foreign countries by the Director and other parties of the assessee company.

The entire details of foreign travel expenditure together with the purpose of travel were duly furnished by the assessee before the AO together with the bills and vouchers thereon vide submission dated 18/10/2016.

It was viewed that the foreign travel expenditure included air ticket of Rs.1,58,880/-, hotel and boarding charges of Rs.11,22,619/-, expenses incurred towards visa conveyance etc., of Rs.1,82,777/- and sales promotion expenditure of Rs.59,096/-. All these expenditures should only be construed as incurred for the business of the assessee.

 It was evident from the ledger book that the travel expenditure of Mrs Ragini Barfiwala has been reimbursed by her to the assessee company and the expenditure of the assessee is duly credited to that extent which proves that no expenditure about Mrs Ragini Barfiwala has been debited in the books of the assessee company.

The ITAT found that the details were duly furnished before the lower authorities which had been ignored by the lower authorities and further the tribunal directed the AO  to delete the disallowances made on account of foreign travel expenses.

The ITAT bench of Shri Amit Shukla, judicial member & Shri M Balaganesh, accountant member observed that the assessee had incurred travelling expenses to meet various customers and to go along with various customers coming from various parts of the country for evaluation of mining prospects. It was held by the bench that the entire travelling expenses were incurred wholly and exclusively for the business of the assessee only and there cannot be any Adhoc disallowance towards the same. Further directed to delete the same.

Shri Madhur Agrawal appeared on behalf of the assessee and Shri U. Singh appeared on behalf of the revenue.

To Read the full text of the Order CLICK HERE

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