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TMI Blog2018 (4) TMI 260X X X X Extracts X X X X X X X X Extracts X X X X ..... es at all. We confirm the order of CIT(A) confirming the disallowance of foreign travelling expenses. Issue of assessee’s appeal is dismissed. Disallowance of telephone expenses and motor car expenses at the rate of 10% on adhoc basis - Held that:- Estimation of the AO for 10% use of such communication devices for personal & non-use purposes, cannot be termed as excessive. Apart-from that from the details of the vehicles. We find that there are a no. of luxury vehicles which are used by the partners of the firm. The appellant has not brought on record details of personal vehicles in the names of the partners whose expenses are not debited by the firm during the year under consideration. Such details, the act of the AO to estimate persona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 3. Briefly stated facts are that the assessee is engaged in the business of export of Textile of readymade garments, made up fabric and handicraft items. The AO noted from the profit and loss accounts during the course of assessment proceedings that the assessee has debited the travelling expenses of ₹ 88,39,145/-, which includes foreign traveling expenses of ₹ 80,11,755/- and local travelling of ₹ 8,27,390/-. The AO require the assessee to explain the foreign travelling expense including foreign trips to Malaysia, Singapore and Sri Lanka, the details of which are as under:- 4. As the assessee could not explain the purpose of these trips to foreign countries by Shri Shiv Hari Agarwal, Siddarth and Sandhini. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red for business purpose. Once the AO has brought on record that there is no business connection with these countries and no business purpose is established with respect to visit to these three countries, the onus shifts on the appellant to provide any cognate material to justify the expenses It is not the case of the AO that the entire foreign expense of ₹ 80,11,355/- has been disallowed by the AO, but he has found expenses of ₹ 6,10,422/- only related to three countries where neither any business connection was found nor any business purpose was apparent. I find that the appellant has completely failed in supplying any document to justify business purpose as far as foreign expenses of ₹ 6,10,422/- are concerned. Just bec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dismissed. 6. The next issue in this appeal of assessee is against the order of CIT(A) conforming the disallowance of telephone expenses and motor car expenses at the rate of 10% on adhoc basis. For this assessee has raised the following grounds:- 2. On facts and in law, the Ld. CIT(A) had erred in confirming the disallowance out of telephone expenses amounting to ₹ 1,92,076/- on ad-hoc basis (10%) without appreciating the facts of the case. Under the facts and circumstances of the matter, the Id. CIT(A) ought not to have confirmed the said disallowance of ₹ 1,92,076/- made by the LAO in the impugned assessment order. 3. On facts and in law, the Ld. ClT(A) had erred in confirming the disallowance out of Motor car ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to establish that the partners and the employees have other telephone and mobile phone instruments, bills of which are not incurred/reimbursed by the firm during the year under consideration. During the appellate proceedings, it is admitted that personal element in the use of the telephones, cell phones cannot be ruled out. Hence, the estimation of the AO for 10% use of such communication devices for personal non-use purposes, cannot be termed as excessive. Apart-from that from the details of the vehicles. I find that there are a no. of luxury vehicles which are used by the partners of the firm. The appellant has not brought on record details of personal vehicles in the names of the partners whose expenses are not debited by the firm dur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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