2012 (5) TMI 440 - ITAT, DELHI

Disallowance of 90% of expenses related to other group concerns and their directors or their relatives - held that:- while accepting the principle that for eligibility of an allowance under section 10(2)(xv), there should be a nexus between the expenditure and the purpose of the business and the expenditure should have been wholly and exclusively laid out for that purpose.

Merely because the assessee's income, after incurring such expenses, was found to be little or negligible, it cannot be said that the said expenditure became an impermissible deduction. Once it is found that the expenditure was bona fide incurred and that the same related to the business activity, then it would become deductible as the same is permitted by the provisions of law. In the light of view taken in these decisions, we are of the opinion that disallowance of a portion of establishment expenses by the ld. CIT(A) was not justified. - The mere fact that no tangible business came out of the foreign visit is not a ground for disallowing the foreign travel expenditure, because it is possible that in the first meeting only business discussions would take place and nothing tangible may come out. - Unless the business is abandoned or closed and even if business is at a dormant stage waiting for proper market conditions to develop, the expenditure incurred in the course of such a business is to be allowed as deduction.

Delay in filing an appeal - Appeal against order of Rectification u/s 154 - held that:- the asseessee seems to be quite negligent by not taking the necessary steps for filing the appeal within the time prescribed by the statute. The conduct of the assessee reveals that the assessee takes the condonation of delay provision as granted. The assessee did not care to submit any request for condonation of delay, even when it was brought specifically to their notice. In granting the indulgence and condoning the delay, it must be proved beyond the shadow of doubt that the assessee was diligent and was not guilty of negligence whatsoever. - Delay not condoned - decided against the assessee.