9911796707
TMI Blog2006 (7) TMI 352X X X X Extracts X X X X X X X X Extracts X X X X ..... amount recoverable from Sun Pharma for Burma visit expenditure. Thus, the total expenditure received in this regard was Rs. 5,34,675 against which the assessee has shown that it has incurred an expenditure amounting to Rs. 4,70,616. The Assessing Officer noticed that these expenses include the expenses incurred on foreign travel - Rs. 2,62,456 on travel to Dubai, Burma, Thailand and Cambodia. On query by the Assessing Officer, the assessee submitted that the travel was not in connection with GEIOC but it was for the business purpose. In Dubai it was to identify possibility of consulting arrangements. The names and addresses of six persons in Dubai, along with photocopies of their visiting cards were furnished. In Thailand, it was stated that the partners met representatives of Thai petrochemical companies to explore possibilities of export of intermediates and import of polymers for an Indian company. In respect of Burma, it was stated that the purpose of travel was for market research to prepare a report on potential for pharma export to Burma. In respect of Cambodia, no explanation was submitted. The Assessing Officer noted that the expenditure on travel to Dubai was only for ai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned, except the names of the persons contacted and the letter from Baseem Trading Est., nothing has been submitted. From the said letter, it is seen that the son of the partner of the appellant firm stays in Dubai. It is further seen that the tour to Thailand and Cambodia was package tour and the same was the case in Burma indicating that the tours were personal in nature. It is also seen that the appellant has worked during the year only for GEIOC and for this work, the appellant was not required to visit any foreign country. The appellant has also not given any details regarding the project on which he was working except that he went to these countries to explore possibilities of business tie-up and export/import. This is a very vague explanation and does not prove that the visits were related to the business activity of the appellant. Only in the case of visit to Burma, it appears that he was asked by the company namely Sun Pharma to do some work. The appellant was to receive certain sum from them. But here also the details of work have not been given. However, because certain payment has come, it may be accepted that the appellant might have done some work for the said Sun Pha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y which can be termed as a package tour in other countries and since it was safer way of travelling the assessee visited there through package tour. The tour is a package tour and it need not prove automatically that no business is involved in this kind of package tour. The Assessing Officer although recognized the business purpose for Burma trip, but has not allowed the full expenditure of foreign travelling incurred by the assessee. The visits to Burma and Thailand are not for pleasure trip. Therefore, it was contended that the expenditure on travel to foreign must be fully allowed. 5. The learned DR, on the other hand, contended that the assessee went to four places. There is no evidence of any business being accrued out from these places. Even in the subsequent year also no income has been accrued to the assessee from these places. Package tours are taken for personal pleasure. Had the assessee-company to explore business possibilities, the assessee would not have taken package tour. In package tour, the travel is to visit to the places, which are covered by the package tour and has to move according to whims of the tour operators. The person is not free to move the places ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ital expenditure. The term for the purpose of business is wider than the expression "for the purpose of earning income". For the purpose of business will mean that the expenditure should be for the carrying of the business. It need not be for the earning of the profit and if it is incurred for commercial expediency for the carrying of the business, it must be allowed. Even an expenditure incurred by an assessee voluntarily during the course of business without necessity can be allowed if it is incurred for the promoting the business and to earn profit even though there is no compelling necessity to incur such expenditure. The onus that the expenditure has been incurred for the purpose of the business is on the assessee. The assessee has to prove the genuinity of the expenditure. Merely that the assessee has not earned the income, does not mean that the assessee will not be entitled to claim the expenditure if the expenditure has been incurred for the purpose of business and it is not a capital or personal expenditure. This is a fact that the assessee adduced the evidence in this case so far as the visit to Dubai. The evidence are available in the form of the letter of the par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business purpose in respect of visit to Burma. For the visit to Thailand and Cambodia, we are of the view that these visits have been carried out by the assessee for personal purpose of the partner as partner has gone to these countries also through package tours and the visit through package tour are for personal purposes. No cogent material or evidence was brought on record by the assessee which may prove that the visit of these countries were not for the personal purposes but for the purposes of the business. As we have already held that the onus is on the assessee to prove that the assessee has visited these countries for the purpose of business. Merely that the assessee went to these countries through package tour will not automatically prove that the assessee has gone to these countries and incurred expenditure for the purpose of business. We, therefore, do not find any illegality or infirmity in the order of the CIT(A) so far disallowing the expenditure for the purpose of foreign travelling in respect of visits to Burma, Thailand and Cambodia. Accordingly, we confirm the order of the CIT(A) so far as it relates to sustenance of the disallowance out of the foreign expenditure ..... X X X X Extracts X X X X X X X X Extracts X X X X
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