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The Tax PublishersTCA Nos. 10 and 11 of 2019
2020 TaxPub(DT) 4030 (Mad-HC) : (2021) 276 TAXMAN 0141INCOME TAX ACT, 1961
Section 37(1)
As there was a gradual increase in sales compared to the earlier years by subsidiary companies in the foreign country and, therefore, foreign travel expenditure incurred by assessee to safeguard business interest was allowable as normal business expenditure, especially when bona fides and genuineness of expenses incurred by assessee towards foreign travel was never in doubt.
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Business expenditure - Foreign travel expenses - Business purpose -
Assessee claimed deduction of foreign travel expenditure incurred by it. AO disallowed deduction alleging no business purpose. Assessee's case was that subsidiaries in foreign country were exclusive companies, which dealt in only with products of assessee and expenditure was incurred by assessee, holding company, to keep subsidiary companies in foreign country to continue to do their business. Held: As evident from annual report of assessee, there was a gradual increase in sales compared to the earlier years by subsidiary companies in the foreign country and, therefore, foreign travel expenditure incurred by assessee to safeguard business interest was allowable as normal business expenditure, especially when bona fides and genuineness of expenses incurred by assessee towards foreign travel was never in doubt.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2010-11
INCOME TAX ACT, 1961
Section 37(1)
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