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| The Tax Publishers2019 TaxPub(DT) 7526 (Del-Trib) INCOME TAX ACT, 1961
Section 37(1)
Since assessee had started deploying skillful personnel and covered last mile of its preparedness when sales head was appointed, therefore, it was entitled to claim expenses towards travel as revenue expenditure, irrespective of any business activity during relevant year.
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Business expenditure - Allowability - Travel expenses claimed by assessee -
AO alleged that no business activity was conducted during year under consideration and assessee-company did not furnish any substantial evidence to show that travel expenses were actually incurred for travelling made for business purposes, therefore he disallowed the same. Held: Since assessee had started deploying skillful personnel and covered last mile of its preparedness when sales head was appointed, therefore, it was entitled to claim expenses as a revenue expenditure. Assessee had started its business operation on date of recruitment of sales head, thus CIT(A) rightly directed AO to obtain details of expenses and allow the same as deduction in the year under consideration.
REFERRED : Dhoomketu Builders & Development (P) Ltd. v. Addl. CIT (2012) 17 taxmann.com 36 (Del) : 2012 TaxPub(DT) 1088 (Del-Trib)
FAVOUR : In assessee's favour
A.Y. : 2009-10
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