OMEGA REALTECH LIMITED, MUMBAI V. DEPUTY COMMISSIONER OF INCOME TAX 3(2)(2), MUMBAI

ITA 7429/MUM/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 4659 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 28-12-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S ABI RAMA KARTIKEYAN
• Keywords: Business expenditure; Question of law
• Section: 143(3); 115JB; 250; 208; 37

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C, MUMBAI BEFORE SHRI R.C. SHARMA (AM) & SHRI PAWAN SINGH ( JM) ITA NOS. 7429 & 7430/MUM/2017 (ASSESSMENT YEARS : 2013-14 & 2014-15) M/S OMEGA REALTECH LTD 34-B, JOLLY MAKER CHAMBER NO.2, 3 RD FLOOR, NARIMAN POINT, MUMBAI-21 PAN : AABCO0454A VS DCIT, CIR.3(2)(2), MUMBAI APPELLANT RESPONDEDNT APPELLANT BY SHRI RAKESH JOSHI AR RESPONDENT BY SHRI S ABI RAMA KARTIKEYAN SR DR DATE OF HEARING 05-09-2019 DATE OF PRONOUNCEMENT 16-10-2019 O R D E R PER PAWAN SINGH, JM : 1. THESE APPEALS FILED BY THE ASSESSEE ARE DIRECTED AG AINST THE SEPARATE ORDERS OF CIT(A)-8, MUMBAI BOTH DATED 04 TH SEPTEMBER, 2017 FOR THE ASSESSMENT YEARS 2013-14 & 2014-15. IN BOTH THE APP EALS THE ASSESSEE HAS RAISED IDENTICAL GROUNDS OF APPEAL EXCEPT VARIA TION OF FIGURES; HENCE, BOTH THE APPEALS WERE CLUBBED, HEARD TOGETHE R AND ARE DECIDED BY CONSOLIDATED ORDER. WITH THE CONSENT OF THE PART IES, THE APPEAL FOR AY 2013-14 IS TREATED AS LEAD CASE. THE ASSESSEE HA S RAISED THE FOLLOWING COMMON EFFECTIVE GROUND OF APPEAL:- 1 ) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ACTION O F LEARNED ASSESSING OFFICER IN DISALLOWING THE FOREIGN TRAVELLING EXPEN SES ON THE ALLEGED PLEA ITA 7429-30/MUM/2017 OMEGA REALTECH LTD 2 THAT THE SAME WAS NOT INCURRED FOR BUSINESS PURPOSE, WITHOUT CONS IDERING THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE BRIEF FACTS OF THE CASE TAKEN FROM ITA NO.7429/ MUM/2017 ARE THAT THE ASSESSEE IS IN THE BUSINESS OF REAL ESTATE AND PROPERTIES REDEVELOPMENT OF SLUM REHABILITATION AUTHORITY (SRA ) PROJECT. THE ASSESSEE FILED ITS RETURN OF INCOME ON 29-09-2013 D ECLARING TOTAL INCOME AT RS. 1,02,06,069/-. THE ASSESSING OFFICER , IN HIS SCRUTINY ASSESSMENT MADE U/S 143(3) ON 23-03-2016, COMPUTED TOTAL INCOME AT RS.2,00,35,007/- AND BOOK PROFIT U/S 115JB AT RS.9 5,36,526/-. THE ASSESSING OFFICER BESIDES OTHER ADDITIONS MADE DISA LLOWANCE OF FOREIGN TRAVEL EXPENSES OF RS.27,06,407/-. AGGRIEVED, ASSE SSEE FILED APPEAL BEFORE CIT(A) AGAINST ALL THE ADDITIONS / DISALLOWA NCES. THE LD. CIT(A) CONFIRMED DISALLOWANCE OF FOREIGN TRAVEL EXP ENSES. FURTHER AGGRIEVED, THE ASSESSEE HAS FILED THE PRESENT APPEA L BEFORE THIS TRIBUNAL. 3. WE HAVE HEARD THE SUBMISSIONS OF THE LD AUTHORISED REPRESENTATIVE (AR) FOR THE ASSESSEE AND THE LD. DEPARTMENTAL REPRESENT ATIVE (DR) FOR THE REVENUE. THE LD. AR OF THE ASSESSEE SUBMITTED THAT THE FOREIGN TRAVEL EXPENSES HAVE BEEN INCURRED WHOLLY AND EXCLUSIVELY FOR BUSINESS PURPOSE. MERELY BECAUSE IN THE SAID FOREIGN TRAVEL, NO BUSINESS COULD BE TRANSACTED OR THE FOREIGN TRAVEL DID NOT RESULT IN ANY BAGGING OF CONTRACT, ITA 7429-30/MUM/2017 OMEGA REALTECH LTD 3 IT CANNOT BE SAID THE SAID EXPENSE WAS NOT FOR BUSI NESS PURPOSE. THE SOLE INTENTION WAS TO EXPAND AND GRADUALLY GROW BUS INESS OUT OF ITS PRESENT BOUNDARIES. IN SUPPORT OF HIS SUBMISSIONS T HE LD.AR PLACED HIS RELIANCE ON THE FOLLOWING CASE LAWS (A) CIT VS NUCHEM (2012) 208 TAXMAN 250 (MAG.)(P&H)(HC) (B) J. TOOLS & CASTINGSW (P.) LTD VS ACIT (2 012) 139 ITD 414 (ASR- TRIB) (C ) CIT VS SUPERIOR CRAFTS (2013) 353 ITR 101 / 82 DTR 209 (DEL ). 4. THE LD. AR SUBMITS THAT IN CIT VS SUPERIOR CRAFT ( SUPRA) TRIBUNAL SUSTAINED THE DISALLOWANCE OF 20% OF THE EXPENDITUR E CLAIMED, WHICH WAS UPHELD BY HONBLE DELHI HIGH COURT, WHEN FULL DETAILS AND EVIDENCE WERE NOT AVAILABLE TO QUANTIFY THE EXPENDI TURE. THE LD.AR SUBMITTED THAT IN THE INSTANT CASE FULL DETAILS OF THE EXPENDITURE ARE AVAILABLE; THEREFORE, THE ENTIRE EXPENDITURE CLAIME D HAS TO BE ALLOWED AS BUSINESS EXPENDITURE. IN THIS CONNECTION, HE SU BMITTED THE FOLLOWING DETAILS, WHICH IS PLACED ON RECORD:- DATE PARTICULARS AMOUNT 7-5-12 GREATER BOMBAY CO - OP BANK PAID TO WEIZMANN FOREX L TD FOR AKASH SETHI FOR USA VISIT 1,08,600 7-5-12 GREATER BOMBAY CO - OP BANK PAID TO WEIZMANN FOREX LTD FOR GAURAV SETHI FOR USA VISIT 1,08,600 7-5-12 CASH PAID TO WEIZMANN FOREX L TD 462 31-5-12 AEB (3769 / 82008) PAID FOR VISIT TO URBANA & CHICAGO FOR GAURAV SETHI 1,15,536 25-6-12 HSBC (4617/82008) PAID FOR VISIT OF RK SETHI FOR NEW YORK 10,925 28-06- 2012 AEB (3769/82008) FOR VISIT TO NEW YORK & BROOKLYN BY AKASH SETHI 1,49,100 5-7-12 GREATER BOMBAY CO - OP BANK PAID TO WEIZMANN FOREX L TD FOR RK SETHI & VARSHA SETHI FOR THAILAND VISIT 2,23,112 6-7-12 GREATER BOMBAY CO - OP BANK PAID TO WEIZMANN FOREX L 55,994 ITA 7429-30/MUM/2017 OMEGA REALTECH LTD 4 TD FOR VARSHA SETHI FOR THAILAND VISIT 13-8-12 GREATER BOMBAY CO - OP BANK PAID TO AKBAR TRAVELS OF INDIA PVT LTD FOR RK SETHI & AKASH SETHI FOR BANGKOK VISIT 1,65,173 29-9-12 AEB (3769/82008) AMOUNT PAYABLE TO AEB CARD OF GAURAV SETHI AS PER STATEMENT ATTACHED FOR NEW YORK VISIT 92,258 8-10-12 GREATER BOMBAY CO - OP BANK PAID TO WEIZMANN FOREX L TD FOR PURCHASE OF FOREIGN CURRENCY FOR BANGKOK VISIT 2,06,702 5-11-12 GREATER BOMBAY CO - OP BANK PAID TO WEIZMANN FOREX L TD FOR PURCHASE OF FOREIGN CURRENCY FOR BANGKOK VISIT 82,222 5 - 11 - 12 GREATER BOMBAY CO - OP BANK PAID TO AKBAR TRAVELS OF INDIA PVT LTD FOR VISIT TO ISTANBUL FOR RK SETHI & VARSHA SETHI 1,69,778 29 - 11 - 12 GREATER BOMBAY CO - OP BANK PAID TO AKBAR TRAVELS CORPORATE DIVISION FOR VISIT TO BANGKOK FOR KC SETHI , KAMALADEVI SETHI , GAURAV SETHI & NEHA SETHI 1,24,934 23.11.12 CITI BANK (43896/3322) FOR VISIT TO BALENGIAGA FOR RK SETHI 99,359 23.11.12 GREATER BOMBAY CO - OP BANK PAID TO AKBAR TRAVELS CORPORATE DIVISION FOR VISIT TO BANGKOK FOR KC SETHI , KAMALADEVI SETHI , GAURAV SETHI & NEHA SETHI FOR FOREIGN TRANSIT INSURANCE 2,848 28.11.12 AEB (3769/82008) AMOUNT PAYABLE TO AMERICAN EXPRESS CARD FOR NEWYORK VISIT OF RK SETHI , K . C . SETHI & GAURAV SETHI AS PER STATEMENT ATTACHED . 3,13,083 05.1.13 AEB (3769/82008) AMOUNT PAYABLE TO AEB CARD FOR NEW YORK VISIT OF AKASH SETHI & RK SETHI AS PER BILL ATTACHED 74,366 7 - 1 - 13 GREATER BOMBAY CO - OP BANK PAID TO AKBAR TRAVELS CORPORATE DIVISION FOR NEW YORK VISIT OF AKASH SETHI & RK SETHI AS PER BILL ATTACHED 74,366 8-2-13 GREATER BOMBAY CO - OP BANK PAID TO KRISIA HOLIDAYS & HOTELS WORLDWIDE VISIT TO BHOLIDAY INN SILOM BANGKOK BY VARSHA SETHI 36,081 9-2-13 GREATER BOMBAY CO - OP BANK PAID TO WEIZMANN FOREX L TD FOR PURCHASE OFFOREIGN EXCHANGE FOR BANGKOK VISIT 4,05,637 6-3-13 AXIS BANK (4718/55769) EXPENSES INCURRED IN BANGKOK VISIT 5,794 7-3-13 GREATER BOMBAY CO - OP BANK PAID TO AKBAR TRAVELS CORPORATE DIVISION FOR NEHA SETHI VARSHA SETHI & ONE PERSON FOR VISIT TO BANGKOK 63,867 13-3-13 AEB (3769 / 82008) AMOUNT PAYABLE TO AEB CARD FOR NEW YORK VISIT OF GAURAV SETHI AS PER STATEMENT ATTACHED 43,833 ITA 7429-30/MUM/2017 OMEGA REALTECH LTD 5 14.3.13 GREATER BOMBAY CO - OP BANK EXPENSES AT NEW YORK & BANGKOK VISIT 94,887 20-3-13 CITI BANK (5498 / 4571) AMOUNT PAYABLE TO CITI BANK CREDIT CARD OF GAURAV SETHI AS PER STATEMENT ATTACHED . FOR PURCHASE OF US DOLLAR 4,791 30-3-13 AEB (3769/82008) EXPENSES INCURRED IN NEW YORK VISIT 3,598 TOTAL 27,06,407 5. THE LD.AR, THEREFORE, SUBMITTED THAT THE EXPENSES A S CLAIMED MAY BE ALLOWED IN FULL AS THE SAME HAS BEEN EXPENDED IN CO NNECTION WITH CARRYING OUT BUSINESS. THE LD.AR ALSO RELIED UPON THE DECISION IN THE CASE OF SCINDIA INVESTMENTS (P) LTD VS ACIT [2010] 40 SOT 239 (MUM) AND SUBMITTED THAT IN THIS CASE, THE TRIBUNAL HELD THAT THE BASIS GIVEN BY THE LD.CIT(A) TO DISPUTE OR DOUBT THE ALLO WABILITY OF FOREIGN TRAVEL EXPENDITURE WAS NOT CORRECT AND MER3ELY BECA USE THERE WAS NO BUSINESS ACTIVITY OF THE ASSESSEE COMPANY IN FOREIG N COUNTRIES, IT CANNOT BE SAID THAT THE FOREIGN TRAVEL EXPENSES WER E TO BE STRAIGHTAWAY DISALLOWED AND THE ASSESSING OFFICER WAS WRONG IN M AKING THE SAID DISALLOWANCE OF EXPENDITURE. THE LD.AR SUBMITTED T HAT THE RATIO OF THIS DECISION IS SQUARELY APPLICABLE TO THE CASE OF THE ASSESSEE. 6. THE LD. DR FOR THE REVENUE, ON THE OTHER HAND, RELI ED UPON THE ORDERS OF AUTHORITIES BELOW. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF THE PAR TIES AND PERUSED THE MATERIAL PLACED BEFORE US. WE NOTICE FROM THE ORDER OF ASSESSING OFFICER THAT HE HAS NOT DISCUSSED THE ISSUE IN DETA IL. HE SIMPLY ITA 7429-30/MUM/2017 OMEGA REALTECH LTD 6 DISALLOWED THE EXPENDITURE ON THE REASON THAT BUSIN ESS EXPENSES HAVE NO BASIS. THE LD. CIT (A) CONFIRMED THE ACTION OF THE AO. BEFORE US THE LD. AR FOR THE ASSESSEE HAS FURNISHED THE DETAI LS OF THE EXPENSES, WHICH WE HAVE RECORDED ABOVE. KEEPING IN VIEW OF TH E DETAILS AND NATURE OF EXPENSES, WE ARE IN AGREEMENT WITH THE SU BMISSIONS OF THE LD AR FOR THE ASSESSEE THAT MERELY NO BUSINESS COULD B E TRANSACTED OR THE TRAVEL COULD NOT RESULT ANY CONTRACT, IT CANNOT BE SAID THAT THE EXPENSES WERE NOT FOR THE BUSINESS. WE HAVE NOTED THAT THE E XPENSES WERE FILED BEFORE THE LOWER AUTHORITIES, THOUGH THE SAME WAS N OT CONSIDERED BY THEM, THEREFORE, CONSIDERING THE NATURE OF THE EXPE NSES, WE DEEM IT APPROPRIATE TO RESTRICT THE SAME TO THE EXTENT OF 25% OF SUCH EXPENSES CLAIMED BY THE ASSESSEE. 8. THE HONBLE DELHI HIGH COURT IN CIT VS SUPERIOR CRA FTS (SUPRA) WHILE DECIDING THE SIMILAR QUESTION OF LAW HELD AS UNDER; 10. THE NEXT QUESTION RELATES TO DISALLOWANCE/ADDITION OF RS. 25,80,879/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF TRAVELL ING EXPENSES INCURRED BY DEVEN CHACHRA, WHO IS RELATED TO THE PARTNERS OF THE FIRM. LEARNED COUNSEL FOR THE REVENUE HAS SUBMITTED THAT THE ORDE R OF THE TRIBUNAL IS PERVERSE AND MERITS INTERFERENCE IN VIEW OF THE FIN DINGS RECORDED BY THE ASSESSING OFFICER, WHICH WERE CONFIRMED BY THE CIT (APPEALS). THE ASSESSING OFFICER WHILE MAKING THE SAID ADDITION HA S OBSERVED THAT DEVEN CHACHRA WAS PAID SALARY OF RS. 1,14,000/- PER ANNUM BUT THIS WAS NOT PAID PURSUANT TO SPECIFIC EMPLOYER- EMPLOYEE RELATIONSHI P. THE EXACT FINDINGS RECORDED BY THE ASSESSING OFFICER READ:- 'UPON THE COMMENTS AS MADE IN OTHER PARA'S AND FIND INGS GIVEN BY THE SPECIAL AUDITOR THAT THE SALARY TO MR. DEVEN CH ACHRA WAS ONLY AN ENTRY AND NOT PAID IN PURSUANCE TO THE SPECIFIC EMP LOYER-EMPLOYEE ITA 7429-30/MUM/2017 OMEGA REALTECH LTD 7 RELATIONSHIP. AT THIS STAGE IT WILL NOT BE OUT OF P LACE TO RELIANCE ON SUB-PARA K BELOW, HIS SALARY IS ONLY RS. 1,14,000/- PER ANNUM AND HIS EXPENDITURE ON THE MOBILE PHONE HAS BEEN CONSIDERED ABOVE OF RS. 2,19,430/- AND THE SAME HAS BEEN DISALLOWED. AGAIN NO EVIDENCE HAS BEEN PLACED ON RECORD TO SUBSTANTIATE THE VISITS OF DEVEN FOR THE PURPOSES OF BUSINESS OF THE FIRM. THE ASSESSEE IS O NLY ATTEMPTING TO COVER UP THE PERSONAL EXPENDITURE AS BUSINESS WITHO UT SUBSTANTIATION. IN VIEW OF ANY EVIDENCE THE ENTIRE EXPENDITURE OF T OUR & TRAVELLING OF DEVEN OF RS. 25,80,879/- IS DISALLOWED.' 11. THE TRIBUNAL BY THE IMPUGNED ORDER HAS HELD THAT D EVEN CHACHRA WAS AN EMPLOYEE. HE IS HAVING DEGREE OF BACHELOR OF SCI ENCE AND ECONOMICS, WITH SPECIALIZATION IN MARKETING FROM PENNSYLVANIA UNIVERSITY, WHARTON SCHOOL OF BUSINESS. HE WAS CEO OF THE FIRM SINCE 19 94. WE MAY NOTE THAT STATEMENT OF DEVEN CHACHRA WAS RECORDED IN THE ASSESSMENT YEAR 2003-04 BUT AN AD HOC AMOUNT OF RS. 5 LACS WAS DISA LLOWED FROM THE OVERSEAS TRAVEL EXPENSES ON HIS TRAVEL, ON GROUND O F PERSONAL EXPENSES. THE REVENUE HAS NOT CHALLENGED AND HAS ACCEPTED THE FINDING OF THE TRIBUNAL THAT DEVEN CHACHRA WAS AN EMPLOYEE OF THE RESPONDENT ASSESSEE AND ON THE SALARY PAID TO HIM. BUT, THE CHALLENGE I S TO THE FOREIGN TRAVEL EXPENSES OF RS. 25,80,879/-, ON THE GROUND THAT THE SE WERE NOT INCURRED FOR THE PURPOSE OF BUSINESS. THE ASSESSING OFFICER HAD DISALLOWED THE ENTIRE EXPENDITURE OF RS. 25,80,879/- THE TRIBUNAL WHILE PARTLY DELETING THE DISALLOWANCE HELD THAT THE EXPENSES WERE INCURR ED FOR PURPOSE OF BUSINESS UNDER SECTION 37 AND OBSERVED AS UNDER:- '8.4 WE HAVE PERUSED THE RECORDS AND CAREFULLY GONE THROUGH THE SUBMISSIONS MADE BY BOTH THE PARTIES. THE DISPUTE R AISED IN THIS GROUND IS REGARDING DISALLOWANCE OF TRAVELLING EXPE NSES OF SHRI DEVEN CHACHRA IN INDIA AND ABROAD AMOUNTING TO RS. 2580579/-. THE CASE OF THE ASSESSEE IS THAT SHRI DEVEN CHACHRA WAS AN EMPLOYEE WHO HAD UNDERTAKEN THE TRAVELS FOR NEGOTIATION WITH FOR EIGN BUYERS, NEGOTIATION OF DISPUTED ISSUES AND SETTLEMENT OF RA TES AND APPROVAL OF SAMPLES ETC. THE ASSESSEE HAD FILED COPIES OF E- MA ILS TO SUBSTANTIATE THE CLAIM THAT THE EXPENDITURE HAD BEEN INCURRED FO R THE PURPOSE OF BUSINESS. IT HAS ALSO BEEN SUBMITTED THAT THE EXPEN DITURE UNDER THIS HEAD HAD BEEN ALLOWED IN THE EARLIER YEAR AND IN TH E SUCCEEDING YEAR IN SCRUTINY ASSESSMENTS, AS WAS CLEAR FROM THE CHAR T PLACED AT PAGE 1265 OF PAPER BOOK-IX. THE CASE OF THE REVENUE IS T HAT, IT WAS NOT ESTABLISHED THAT SHRI DEVEN CHACHRA WAS AN EMPLOYEE AND THE EXPENDITURE HAD BEEN INCURRED FOR THE PURPOSE OF BU SINESS. THE E- MAILS PRODUCED BY THE ASSESSEE HAD ORIGINATED FROM INDIA, WHICH CAN BE SENT FROM SITTING IN A ROOM IN INDIA AND THESE D ID NOT CONTAIN DETAILS OF BUSINESS ACTIVITIES. WE HAVE CONSIDERED THE MATTER ITA 7429-30/MUM/2017 OMEGA REALTECH LTD 8 CAREFULLY. OUT OF TOTAL TOUR AND TRAVEL EXPENSES ON ACCOUNT OF MR. DEVEN CHACHRA AMOUNTING TO RS. 2580879/-, A SUM OF RS. 2493842/- IS ON FOREIGN TRAVELLING. FOR CLAIMING ANY EXPENDIT URE AS DEDUCTION, BURDEN IS ON THE ASSESSEE TO PROVE THAT THE EXPENDI TURE HAS BEEN INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS. FROM E- MAILS, IT CANNOT BE ESTABLISHED THAT THE ENTIRE EXP ENDITURE HAD BEEN INCURRED FOR THE PURPOSE OF BUSINESS. THE ONLY DETA ILS GIVEN BY THE ASSESSEE AT PAGE 43 OF PAPER BOOK-V WERE THE PLACE OF VISIT, PURCHASES OF FOREIGN EXCHANGE AND THE MONEY SPENT. MERELY BEC AUSE THE PERSON HAD TRAVELLED ABROAD AND THE MONEY ON FOREIGN TRAVE L HAD BEEN ACTUALLY SPENT, CANNOT ESTABLISH THAT THE EXPENDITU RE WAS INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS. EVEN IF THE FOREIGN TRAVEL HAD BEEN MADE FOR THE PURPOSE OF BUS INESS, THE PERSONAL EXPENSES OR EXPENSES UNRELATED TO THE BUSINESS TRIP CANNOT BE ALLOWED. NO DETAILS WERE GIVEN AS TO HOW THE MONEY WAS SPENT OR WHETHER THERE WAS ANY INVITATION FROM THE BUYERS FOR DISCUS SING ANY BUSINESS MATTER. HOWEVER, WE CAN ALSO NOT OVERLOOK THE FACT THAT SUBSTANTIAL EXPENDITURE ON TOUR AND TRAVEL OF SHRI DEVEN CHACHR A HAVE BEEN INCURRED AND ALLOWED BY THE REVENUE IN THE EARLIER YEARS AS WELL AS IN THE SUBSEQUENT YEAR. IN THE IMMEDIATE PRECEDING YEA R, EXPENDITURE ON THIS ACCOUNT CLAIMED AT RS. 2201052/- WAS ALLOWED I N ASSESSMENT. IN THE IMMEDIATE SUCCEEDING YEAR, THE ASSESSMENT FOR W HICH HAD BEEN COMPLETED AFTER THE IMPUGNED ASSESSMENT, EXPENDITUR E ON ACCOUNT OF TOUR AND TRAVEL OF SHRI CHACHRA HAD BEEN CLAIMED AT RS. 2615341/- AND A SUM OF RS. 5 LACS ON ESTIMATE HAS BEEN DISALL OWED UNDER THE HEAD 'TOUR AND TRAVEL'. THE BUSINESS REQUIREMENT OF THE SUBSTANTIAL TOUR AND TRAVEL BY SHRI CHACHRA HAS THEREFORE, BEEN ACCE PTED BY THE REVENUE AUTHORITIES IN THE EARLIER YEARS AS WELL AS IN THE SUBSEQUENT YEAR. THE DISALLOWANCE OF ENTIRE EXPENDITURE IS THE REFORE, NOT JUSTIFIED. ONE OF THE REASONS GIVEN BY THE AUTHORIT IES BELOW FOR MAKING THE DISALLOWANCE OF ENTIRE EXPENDITURE WAS T HAT HE WAS NOT AN EMPLOYEE. BUT THIS ASPECT, WE HAVE ALREADY DEALT WI TH WHILE DEALING WITH ANOTHER GROUND RELATING TO DISALLOWANCE OF SAL ARY IN THE LATER PART OF THIS ORDER AND HAVE HELD IN PARA 12.5 THAT SALAR Y HAS TO BE ALLOWED AS DEDUCTION. HOWEVER, THE FULL DETAILS AND EVIDENC E ARE NOT AVAILABLE TO QUANTIFY AS TO HOW MUCH EXPENDITURE HAD BEEN INC URRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS. EXPENDITUR E ON TRAVELLING MAY VARY SUBSTANTIALLY FROM YEAR TO YEAR AS THE BUS INESS REQUIREMENT MAY NOT BE THE SAME. IN OUR VIEW, CONSIDERING THE E NTIRETY OF FACTS AND CIRCUMSTANCES INCLUDING THE PAST RECORD, IT WIL L BE APPROPRIATE TO DISALLOW ON ESTIMATE 20% OF THE EXPENDITURE CLAIMED AS NOT INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS. WE ORDER ACCORDINGLY. THE ORDER OF CIT(A) WILL BE MODIFIED T O THAT EXTENT.' ITA 7429-30/MUM/2017 OMEGA REALTECH LTD 9 12. THUS, THE TRIBUNAL HAS ESTIMATED AND DISALLOWED 20 % OF THE FOREIGN TRAVEL EXPENDITURE ON THE GROUND THAT IT MAY NOT HA VE BEEN INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS. THE SAID AMOUNT WILL BE SLIGHTLY MORE THAN RS. 6 LACS. WE FAIL TO UNDERS TAND WHY AND ON WHAT GROUND THE REVENUE CAN CLAIM AND SUBMIT THAT THE FI NDINGS RECORDED BY THE TRIBUNAL ARE PERVERSE. NO SUBSTANTIAL QUESTION OF LAW, THEREFORE, ARISES ON THE SAID ASPECT. 9. IN VIEW OF THE AFORESAID DISCUSSION, AND RESPECTFUL LY FOLLOWING THE ORDER OF HONBLE DELHI HIGH COURT AS NOTED ABOVE, W E DIRECT THE AO TO RESTRICT THE DISALLOWANCE TO THE EXTENT OF 25% OF T HE FOREIGN TRAVELLING EXPENSES. IN THE RESULT THE GROUND OF APPEAL RAISE D BY THE ASSESSEE IS PARTLY ALLOWED. ITA NO.7430/MUM/2017 AY 2014-15 10. THE ISSUE AND FACTS AND CIRCUMSTANCES INVOLVED IN T HIS APPEAL ARE UNDISPUTEDLY IDENTICAL TO THE APPEAL FOR AY 2013-14 . THE ASSESSING OFFICER HAS DISALLOWED THE EXPENSES AS ACCORDING TO HIM, BUSINESS EXPENSES HAVE NO BASIS. SINCE WE HAVE ALREADY PAR TLY ALLOWED THE APPEAL FOR ASSESSMENT YEAR 2013-14, THEREFORE, THIS APPEAL IS ALSO ALLOWED WITH SIMILAR DIRECTIONS. 11. IN THE RESULT, BOTH THE APPEALS ARE PARTLY ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 16-10-2019. SD/- SD/- (R.C. SHARMA) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIALMEMBER MUMBAI, DT : 16 OCTOBER, 2019 ITA 7429-30/MUM/2017 OMEGA REALTECH LTD 10 PK/- COPY TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR /TRUE COPY/ BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI