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TMI Blog2012 (12) TMI 664X X X X Extracts X X X X X X X X Extracts X X X X ..... see, being a global company, which has business interest all over the world, such kind of business trip by senior officials cannot be disallowed simply on the reason that the assessee does not have direct transactions of sale or purchase from such countries. Such a myopic perception cannot be upheld in this era, as there can be several reasons in relation to the business. The term “wholly and exclusively for the business purpose” has a very wide meaning and the assessee’s perception as to what is the business purpose has to be given importance. The only requirement is that the assessee has to prove that such expenditures are genuine and for its business purposes. - Decided in favor of assessee. Advertisement expenses - The Assessing Officer disallowed the claim of the assessee on the ground that the services have been rendered in earlier years and, therefore, the same cannot be allowed in this year even if the bills have been raised by these parties in this year. - held that:- Since both the authorities have not examined this issue properly, matter remanded back. Ad-hoc disallowance of expenses - held that:- It is now a settled proposition of law that the Appellate Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ravelling by its employees and are in the nature of reimbursement of the claim made by the employees once they submit their bills to the assessee company. The details of bills were furnished before the Commissioner (Appeals) but he did not agree with the contentions of the assessee and upheld the findings of the Assessing Officer that the assessee has failed to prove that the liability in respect of prior period expenditure crystallized during the year. The assessee, being not satisfied with such a finding given by the Commissioner (Appeals), is in further appeal before the Tribunal. 7. The learned Counsel, appearing on behalf of the assessee, submitted before us that the expenditure incurred by its employees on account of local travel, are reimbursed to them when they submit their bills. He pointed out that these are very petty expenses though incurred in earlier years, but bills have been submitted in this year. The details of these expenses have been placed at Pages-1 to 15 of the paper book. He submitted that the over-all aggregate payments which were meant for earlier years are only for a sum of Rs. 63,894. 8. On the other hand, the learned Departmental Representative subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ences were sent for examination by the Assessing Officer in the remand proceedings. Aggrieved, the assessee is in further appeal before the Tribunal. 15. Learned Counsel for the assessee submitted before us that these expenditures have been undertaken by the higher officials of the company for business meetings at various parts of the world and to discuss various business strategies in relation to the business in India. By way of an illustration, he pointed out that one of the expenditure pertained to Mr. Anup Sharma, who is the Finance Director of the company and has undertaken the business trip in the various countries for discussing various promotional and business strategies. After undertaking such business trips, he has submitted the bills and details wherein it has been specifically shown that these are meant for the purpose of business meetings. Sample copies of such bills have also been placed in the paper book. Likewise, he has given the details of other employees also. He submitted that once these employees have undertaken business trip as per the direction of the management and submitted their bills, then, insofar as the assessee is concerned, it is for the busines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndered in earlier years and, therefore, the same cannot be allowed in this year even if the bills have been raised by these parties in this year. 20. In first appeal, the assessee submitted before the Commissioner (Appeals), the entire details of advertisement expenditure and contended that the bills have been raised in this year and, therefore, the payments which have been made in pursuance of such bills are to be allowed in this year. The Commissioner (Appeals), after referring to the details submitted by the Assessing Officer, confirmed the findings of the Assessing Officer on the ground that the expenditure related to the earlier years and since assessee is following mercantile system of accounting, therefore, the same is to be disallowed in this year. 21. Before us, the learned Counsel drew our attention to the details as are appearing at Page-51 of the paper book and submitted that most of the details pertained to current assessment year only and in some of the cases, bills were dated March 2002. Further, he submitted that even the bills which are dated March 2002, the same were received by the assessee in this year on which the payment has been made. In support of this c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unal, wherein the Tribunal set aside this matter before the Assessing Officer to examine this issue afresh. 29. In the second round of appeal, the Assessing Officer, in pursuance of the directions given by the Tribunal, made 100% of disallowance at Rs. 39,47,212, on the ground that these expenses are already a part of cost of raw material and processing of the said free food and is included in manufacturing cost and purchases. Such a disallowance of 100% has been confirmed by the Commissioner (Appeals) on the ground that it amounts to claim of double deduction. 30. Before us, the learned Counsel for the assessee submitted that once the matter has been set aside by the Tribunal, the assessee cannot be put into a worst situation than what it was at the time of original assessment. Since after giving effect to the order of the Tribunal, there cannot be any scope of enhancement of assessment and, therefore, the disallowance made in the original assessment should stand. In support of this contention, he relied on the judgment of Hon'ble Supreme Court in Mcorp Global (P) Ltd. v/s CIT, [2009] 309 ITR 434 (SC). 31. On the other hand, the learned Departmental Representative submitte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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