INDEXPOORT Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) By this reference under Section 256 of the Income Tax Act, 1961, made at the instance of the assessee, opinion of the High Court is sought for on the following questions of law (relevant to the assessment year 1974-75) :-

(2.) The assessee-firm carries on business as exporters of handicraft items and readymade garments. The assessee made a claim for expenditure on foreign travelling amounting to Rs.73,687.00 which included an amount of Rs.29,681.00 on account of hotel expenses and conveyance. The ITO disallowed Rs.9,894.00 i.e. 1 / 3rd of Rs.29,681.00 and allowed the rest of the claimed expenditure under Section 37(1) of the Act. Appeals preferred by the assessee before the CIT and ITAT have both been rejected. The contention of the assessee was that the entire travelling abroad having been specifically for the purposes of business, no part of the expenditure on such travelling should be disallowed. It would be useful to extract and reproduce the following finding from the order of the Tribunal :-

(3.) The learned counsel for the assessee has reiterated his submissions made before the Tribunal and placed reliance on the decisions of Delhi and Allahabad High Courts - CIT Central New Delhi Vs. Dr.P.N. Behl (1972) 84 ITR 125 and Security Printers of India VS. CIT (1970) 78 ITR 766. On the other hand, the learned counsel for the Department has supported the view taken by the Tribunal and relied on CIT, AP Vs. S.Krishna Rao (1970) 76 ITR 664 AP and CIT Mysore Vs. Dr.B.V. Raman, (1966) 59 ITR 20 and Ram Kishan Sunderlal Vs. CIT U.P., (1951) 19 ITR 324.