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TMI Blog2012 (11) TMI 800X X X X Extracts X X X X X X X X Extracts X X X X ..... at:- Since the AO has not given any reason for disallowance of such expenses. What has been done by the AO is that he made a disallowance in the computational part without assigning any reason. Therefore, in the facts and circumstances of the case, disallowance made by the AO is not justified. Issue decides in favour of assessee - IT APPEAL NOS. 63 & 84 (ASR.) OF 2010 & 65 (ASR.) OF 2012 - - - Dated:- 26-7-2012 - H. S. SIDHU AND B. P. JAIN, JJ. Surinder Mahajan for the Appellant. Tarsem Lal for the Respondent. ORDER 1. These cross appeals of the assessee and the Revenue arise from the order of the Ld. CIT(A), Jalandhar, dated 25.11.2009 for the assessment year 2005-06. The assessee has also filed appeal against the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aw. 5. That on the facts circumstances of the case, Ld. CIT(A) has grossly erred in confirming 20% of foreign travelling expenses of Director and Mg. Director of the company. Addition confirmed by the CIT(A) is illegal and bad in law since foreign traveling expenses of Mg. Director Director of the company have not been discussed in the assessment order. 6. The impugned order passed by the ld. CIT(A) and the AO is contrary to the provisions of law and against all canons of natural justice and is also contrary to facts, material and evidence existing on records. 7. That the assessee requests for leave to add or amend the grounds of appeal before the appeal is heard or disposed off." 3. The Revenue in ITA No. 84(Asr)/2010 has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 3, the ld. counsel for the assessee pointed out the sequence of events and the findings of the AO and the ld. CIT(A) and submitted that the assessment framed is barred by limitation. Since the assessee had never entered into any international transaction in terms of section 92B of the Act and extended time of one year availed by referring to TPO for determination of Arm's Length price was not available. Resultantly, the assessment is barred by limitation and is void ab-initio, since he AO had not given any opportunity of being heard to the assessee before concluding that the assessee had entered into an international transaction in terms of section 92B of the Act. 6. The Ld. DCIT(DR), Sh. Tarsem Lal, on the other hand, pointing out t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n by Sh. Ramesh Uppal Sh. Chand Shoor, the started agents of the assessee to the foreign countries. The AO made a disallowance of the expenditure so claimed. The AO also made total disallowance of the foreign travel expenses claimed with regard to the Managing Director and Director in the computational part. The Ld. CIT(A) upheld the disallowance of foreign travel expenses in the name of these two persons. As regards the disallowance in the name of the Managing Director, the Ld. CIT(A) has restricted the disallowance at 20% vide para 4.5 and 4.6 of his order. 9. We have heard the rival contentions and perused the facts of the case. As per statement of Sh. Ramesh Uppal, who has stated that he had gone abroad on behalf of the assessee-com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of business are allowable even though the object for such expenditure incurred has not been materialized. The reliance was placed on the decision of the Hon'ble Calcutta High Court in the case of CIT v. Woodcrafts Products Ltd. and the decision of the ITAT, Amritsar Bench, in the case of ITO v. Dhiman Systems Accordingly, the AO was not justified in disallowing the expenditure incurred by Sh. Ramesh Uppal and Sh. Chand Shoor in view of their statements and copy of the orders booked and other relevant material placed on record. 10. As regards the disallowance of foreign expenses by the Managing Director and Director, the AO has not given any reason for disallowance of such expenses. What has been done by the AO is that he made a disallo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ur considered opinion, the said Instruction of CBDT is binding upon the Department and the present appeal has been filed contrary to the said Instruction issued by the CBDT. Accordingly, the appeal filed by the Revenue is dismissed as not maintainable. 15. As regards, the appeal of the assessee in ITA No. 65 (Asr)/2012, the brief facts are that the AO levied a penalty of Rs. 12,56,380/- for furnishing inaccurate particulars of income in respect of the disallowance of Rs. 35,02,102 out of foreign travelling expenses claimed by the assessee. The Ld. CIT(A) accordingly sustained the addition with respect to the addition of Rs. 23,38,985/- sustained in the quantum appeal. 16. We have heard the rival contentions and perused the facts of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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