Delhi HC Quashes Denial of Deductions Claimed for Payment of Salary to Expatriate Employees

The Delhi High Court overturned the Income Tax Department's decision to deny tax deductions claimed by Mitsui & Co. India Pvt. Ltd. for salaries paid to expatriate employees. The court ruled that these salaries, despite being paid outside India, should be allowed as deductions under the Income Tax Act. The High Court emphasized that denying such deductions merely due to the method of payment undermines the purpose of business expense deductions. This decision reinforces the principle that legitimate business expenses, irrespective of payment location, should be deductible if they are incurred for the business.