Foreign travel expenses incurred by directors of a company for promoting business activities to be allowed as deduction.
 

1. The assessee is a private Limited company engage in the business of real estate development and construction. The Assessing Officer (AO) disallowed foreign travel expenses of INR 11,55,326 claimed by the assessee in return of income (ROI).
 

2. Assessee stated that the complete details of foreign travel expenses containing details of dollars purchased, visa fees, name of persons who travelled including the directors of the assessee company, country visited, details of air fare and purpose of travel were provided during the course of assessment proceedings. However, the AO completely ignored all the submissions made by the assessee and disallowed the said foreign travel expenses.
 

3. The assessee filed an appeal with Commissioner of Income Tax (A) [CIT(A)] against the assessment order passed under section 143(3) of the Income Tax Act, 1961 (IT Act). The CIT(A) also held that the foreign travel expenses should be disallowed. Further, the assessee filed an appeal with Income Tax Appellate Tribunal (ITAT) against the order of CIT(A).
 

4. ITAT observed that the purpose of such foreign travel undertaken by directors of the company was to explore recent developments in relation to real estate development sites so as to add value to the normal construction activity. Due to this reason the architect was also taken along with the directors to the foreign country.
 

5. The AO observed that the assessee has not derived any benefit out of these foreign tours. Accordingly, the AO held that the foreign travel expenses were incurred for personal purposes only.
 

6. ITAT observed that these foreign travels were undertaken together with the architect and advocate. ITAT considered that no person would take architect and advocate along with him while going on a personal trip abroad. Hence, ITAT contended that the foreign visits were meant only for business purpose. Further, ITAT also contended that the purpose of foreign visits is to be decided by the assessee company and the AO cannot step into the shoes of the asseessee and decide whether the foreign trips required were not.
 

7. In view of the aforesaid observations, I TAT held that CIT(A) was wrong in concluding that the travelling expenses were for personal tours and not meant for the purpose of business. ITAT directed the AO to delete the disallowance made on account of foreign travel expenses amounting to INR 11,55,326. Hence, the ground raised by the assessee is allowed.