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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 ..... ar brand as "Kellogg" which is well known globally. 3. We first take up assessee's appeal in ITA no.5778/Mum./2010, for assessment year 2003-04. 4. In ground no.1, the assessee has challenged disallowance of traveling expenses considered as prior period. 5. This addition is made by the Assessing Officer on the ground that the bills pertaining to travel expenditure are for prior period which cannot be allowed in the year under appeal. Though the Assessing Officer did not doubted the genuineness of the expenditure, however, since they related to prior period, the same were disallowed. 6. The assessee, being aggrieved, went in appeal, wherein before the Commissioner (Appeals), the assessee submitted that the expenditure incurred are on account of travelling 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , this ground becomes infructuous. Consequently, this ground is dismissed as infructuous. 12. In ground no.3, the assessee has challenged the disallowance of Rs. 23,01,621, on account of foreign travel expenditure undertaken by its employees. 13. The Assessing Officer has disallowed the foreign travel expenditure undertaken by its employees to various countries, holding that the expenditure incurred is not for business purpose as the assessee has no business transactions i.e., sale or purchase with these countries. 14. Being aggrieved, the assessee carried the matter before the first appellate authority, wherein the Commissioner (Appeals) confirmed the findings of the Assessing Officer even though all the details of expenditures and evidences 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 illustratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aced on record and also, going by the findings of the Assessing Officer as well as the Commissioner (Appeals), we find that there is no infirmity either in the bills or in the details furnished by the assessee. Therefore, we do not find any reason to confirm the disallowance under the head "Foreign Travel Expenses". Consequently, we set aside the impugned order passed by the Commissioner (Appeals) and allow the ground raised by the assessee. 18. In ground no.4, the assessee has challenged disallowance of Rs. 1,19,30,783, on account of advertisement expenses paid to advertisement agency i.e., Hindustan Thomson Associates. 19. 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. 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 Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -03. 25. In view of our findings given above, this ground has become infructuous. Accordingly, the same is dismissed as infructuous. 26. In the result, assessee's appeal is partly allowed. We now take up assessee's appeal in ITA no.6005/Mum./2010, for assessment year 2002-03. 27. In ground no.1, the assessee has challenged the disallowance of Rs. 39,47,212, in respect of free food allowance. 28. Facts, which are relevant for our adjudication, are that this is the second round of appeal and in the first round, the Assessing Officer has made 50% of disallowance out of these expenses on ad-hoc basis. This was further reduced to 25% by the Commissioner (Appeals). Against this disallowance, the assessee went in appeal before the Tribunal, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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