Issue restored to AO for fresh consideration as additional evidence was filed

1 Assessee was in the hotel business and had claimed a sum of Rs. 15,33,146 on account of travelling expenses of its directors as deduction . The AO called for the evidence to prove the business nexus of the incurrence of the said travelling expenses of directors. According to AO, no details were filed in this regard by the assessee. Accordingly, the AO disallowed the sum of Rs. 15,33,146 as incurred towards personal expenditure of directors.

2 CIT(A) dismissed assessee's appeal.

3 On appeal, the ITAT held as under:

"Since no details were produced before the lower authorities by the assessee, the expenses on account of travelling expenses of directors were disallowed. The evidences submitted in the paper book before us are admitted as additional evidence in the interest of justice and we deem it fit and appropriate to set aside this issue to the file of the Learned AO to decide this issue afresh, in accordance with law. Needless to mention that the assessee be given reasonable opportunity of being heard. The assessee is at liberty to produce further evidences in support of its claim of deduction to prove the business nexus of the visits of the directors. Accordingly, the ground no.2 raised by the assessee is allowed for statistical purposes.”

News Reference:IN THE INCOME TAX APPELLATE TRIBUNAL, "A" BENCH, KOLKATA

Before :Shri Mahavir Singh, Shri M. Balaganesh, Judicial Member, and

Accountant Member ITA No. 1856/Kol/2012 A.Y : 2009-10

M/s. Windamere Hotel Pvt. Ltd Vs. JCIT (OSD)