Utilisation of Travel Expenses for Business purposes can be treated as Deductible Expenditure: ITAT [Read Order]

The New Delhi bench of the Income Tax Appellate Tribunal (ITAT) held that the utilisation of traveling expenses which was used for business purposes and not for personal use can be treated as deductible expenditure. 

Arms Communications Pvt. Ltd, the appellant assessee appealed against the order passed by the Commissioner of Income Tax (Appeals) for confirming the disallowance made by the assessing officer out of traveling expenses on account of foreign travel. 

Sanjay Sood, the counsel for the assessee contended that the assessee had explained the compulsion and utility of such tour for business purposes and the amount which was only utilised for business purposes and not for any personal use by the assessee. 

It was further submitted that the disallowance made by the assessing officer on account of foreign travel was not as per the law and is liable to be deleted. 

P. Praveen Sidharth and Kanv Bali, the counsels for the revenue relied on the decisions made by the lower authorities and contended that the assessee had not substantiated with material that how the foreign visit was for business purposes. Therefore, it cannot be taken that the expenses debited are incidental to the business. 

The bench observed that in the facts and circumstances of the instant case, it was clear that the amount utilised for traveling for business purposes can be treated as a deductible expenditure. 

The two-member bench comprising B. R. R. Kumar (Accountant ) and Yogesh Kumar US, (Judicial) directed the assessing officer to re-adjudicate for allowing the claim of the assessee while allowing the appeal filed by the assessee. 

To Read the full text of the Order CLICK HERE

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