D.R. SINGH, J.M.: Revenue has filed this appeal against order of CIT(A), New Delhi, passed in appeal No. 305 of 2003-04, dt. 8th March, 2004 on following grounds: On facts and in circumstances of case, learned CIT(A) has erred in directing AO to allow deduction under s. 80RRA in respect of consulting fee of USD 26,000 which was adjusted by foreign employer against prior loan taken by assessee. On facts and in circumstances of case, learned CIT(A) has erred in reducing disallowance of travelling expenses from Rs. 8,64,225 to Rs. 2,26,740. First, we shall deal with ground No. 1 of appeal of Revenue involving issue of deduction claimed by assessee under s. 80RRA of IT Act, 1961 in respect of consultancy fee. Briefly stated, facts relating to this issue are that assessee is business consultant rendering services to M/s KLT Power Inc., USA and EI Pasco Energy Co., USA. In return of income for assessment year under consideration, assessee claimed deduction of Rs. 17,53,876 under s. 80RRA of Act in respect of remuneration/fee received by assessee for providing consultancy services to M/s KLT Power Inc., USA (KLT). During September, 1996 to August, 1997, KLT had advanced loan of US $ 50,000 to assessee for purchase of car. However, aforementioned loan was not utilized by assessee for purchase of car and KLT recovered US $ 24,000 @ US $ 2000 per month from consulting fees in earlier year and t h e assessee in his books of account showed balance amount of US $ 26,000 as amount due to KLT. During year under consideration, KLT adjusted balance amount due, i.e. US $ 26,000 against success fee payable to assessee. assessee accounted and offered said amount for tax as income during relevant previous year and claimed deduction under s. 80RRA of Act on amount of US $ 26,000 but same was denied by AO on ground that assessee had failed to fulfil conditions as envisaged in provisions of s. 80RR of Act because said section does not allow set off of advance taken against subsequent income for services rendered. AO held that said fee does not relate to projects undertaken, although same was brought to tax as income of assessee in year under appeal, so, he disallowed deduction of US $ 26,000 (Rs. 9,19,090) under s. 80RRA of Act. Aggrieved with order of AO, assessee filed appeal before CIT(A) and contended before him that assessee received fee of US $ 74,982 equivalent to Indian Rupees 31,07,138 from KLT in terms of agreement dt. 1st Oct., 1999 and same were duly approved by Government of India, Ministry of Finance, Department of Revenue vide their letter No. F. No. 517/A/1163/99/FT and TR copy of which was filed before CIT(A). assessee further submitted that entire foreign currency amounting to US $ 74,982 has been brought in India upto 31st March, 2001 vide certificates of Foreign Inward Remittance Nos. 94463 dt. 22nd May, 2000 and 100430 dt. 9th Oct., .2000 issued by City Bank in Form No. 10H of IT Rules, 1962. He further contended that though AO approved and agreed in principle allowance of deduction under s. 80RRA of Act on balance remuneration o f US $ 48,982 (being US $ 74,982 less US $ 26,000) deduction was inadvertently allowed on rupee equivalent of US $ 30,491 only by reducing from rupee equivalent to US $ 30,491 being Rs. 13,69,543, expenses amounting to Rs. 1,84,012 resulting in net income of Rs. 11,85,531 and consequently deduction under s. 80RRA of Act was allowed at Rs. 7,11,318 being 60 per cent of Rs. 11,85,531. Lastly, he submitted that deduction under s. 80RRA of Act was admissible to assessee because he satisfied all conditions. That, money had been brought to India, that money had been earned for rendering technical services and that only reason that money had been brought to India earlier was not bar against admissibility of deduction. Further, mere adjustment of part amount of success fee was not disqualification. On considering submissions, learned CIT(A) deleted impugned addition by passing detailed order. We have considered rival contentions of both parties, perused records and carefully gone through orders of tax authorities below. only argument, advanced by learned Departmental Representative for Revenue before us, is that since this adjustment of US $ 26,000, taken as advance by assessee towards car loan against consultancy fee, was provided in agreement, assessee was not entitled to deduction for same under s. 80RRA of Act. Whereas on considering submissions of assessee and agreement referred to by assessee placed at page Nos. 21 to 24, we find that as per page No. 22 of this agreement, assessee was paid success fee of US $ 50,000 and this agreement has also been approved by Government of India, Ministry of Finance, Department of Revenue, vide letter dt. 19th Nov., 1999 placed at page No. 20 of paper book. We further find that KLT in its letter addressed to assessee, placed at page Nos. 25 and 26 of paper book, has also mentioned that assessee owed KLT US $ 26,000 from first agreement which they propose to recover from assessee from success fee payable to assessee in terms of 1999 agreement. From page Nos. 7 and 8 of paper book, we find that page No. 8 is certificate of foreign inward remittance for US $ 24,000 which was remitted by assessee as success fee. This fact is mentioned by assessee even in its return at page No. 4 of paper book in note given at end of same. From these documents, we find that assessee has fulfilled terms and conditions of service rendered outside India and same were also approved by Central Government. Payment for service rendered was received in convertible foreign exchange and such payments were brought in India by or on behalf of assessee within prescribed period of six months from end of relevant previous year. payment clause of agreement provided that KLT shall pay US $ 50,000 to assessee as fee/remuneration for rendering consultancy service. Similarly, KLT in its letter has also clearly specified to assessee that it owed KLT US $ 26,000 from first agreement which they proposed to recover from success fee payable to assessee and that have also adjusted balance amount of US $ 26,000 assessee and that have also adjusted balance amount of US $ 26,000 against success fee payable to assessee from year under consideration. These facts could not be controverted either by AO in his order or by learned Departmental Representative of Revenue before us. However, we find that AO did not take into account US $ 26,000 for computing deduction under s. 80RRA on ground that said section does not allow such advances taken against subsequent income for service rendered, even though such amount was recorded as income accrued during relevant previous year and taken as such. Hence, we are of opinion that this reasoning of AO in disallowing claim of US $ 26,000 under s. 80RRA of Act has no convincing basis. Once assessee is held to be entitled to deduction under s. 80RRA of Act for total amount of success fee of US $ 50,000 then deduction under s. 80RRA of Act cannot be refused to assessee with regard to US $ 26,000 merely because same were adjusted by KLT against payment of success fee due to assessee. So, CIT(A) in his well reasoned and well discussed order has rightly deleted impugned disallowance made by AO and accordingly order of CIT(A) in this regard is upheld and ground No. 1 of appeal of Revenue is rejected. Now, we shall deal with ground No. 2 of appeal of Revenue relating to issue of claim of travelling expenses made by assessee. Briefly stated, facts relating to this issue are that assessee debited total expenditure of Rs. 33,00,338. details of expenses were filed by assessee but AO noted that in one of payment clauses, consulting fee would include all out of pocket expenses including travel to Thailand and also that assessee had received consultancy receipts from EL Paso Energy International Company for pursuing power projects in India. Thus, all reasonable projects related expenses were being reimbursed to assessee. Thus, according to AO expenses claimed by assessee towards travelling could not be substantiated with projects undertaken and moreover foreign travel expenditure other than to Thailand did not constitute to any business and so also assessee did not produce any documentary evidence confirming necessity to tours with business exigency and hence, AO disallowed expenses travelling over and above reimbursement expenses at Rs. 8,64,225 [Rs. 33,00,338 (-) Rs. 24,36,113]. Aggrieved with order of AO, assessee filed appeal before t h e CIT(A) and contended before him that assessee was entitled to reimbursement incurred by him and that out of travelling expenses of Rs. 33,00,338 assessee was reimbursed sum of Rs. 21,54,619 and remaining sum of Rs. 11,45,719 was not reimbursed to assessee. assessee further contended before CIT(A) that assessee had incurred non-reimbursable expenditure amounting to Rs. 4,25,519 for visit undertaken to Singapore, Sydney in November, 2000 to attend Asian Pacific Officers Annual Meet of EI PSO at Sydney. This journey was undertaken to view participants discuss plans for next three years and to help fixing targets and to have review of previous year performance. assessee not being employee of said company was not officially invited to conference; however, assessee attended said conference at his own cost in order to meet all officers of region and to understand EI PASO s plans for future. He further contended that besides expenses upto Rs. 1,84,012 were incurred by assessee on air travel and accommodation charges for trips undertaken to Thailand, which were borne by assessee himself as business expenses. After considering submissions, learned CIT(A) partly deleted impugned addition made by AO and sustained addition of Rs. 2,26,740 mainly observing that in this case excess travelling and conveyance expenses incurred over reimbursement of expenses disallowed by AO at Rs. 8,64,225 whereas assessee has explained before him in appeal that sum of Rs. 1,84,012 was on trip to Thailand for KLT Power work. Thus, according to CIT(A), in totality of circumstances, disallowance at 1/3rd of balance of Rs. 6,80,213 was confirmed for expenditure held not for business/professional exigency which would mean disallowance of Rs. 2,26,740 liable to be confirmed as inadmissible and thereafter CIT(A) deleted balance disallowance made by AO and confirmed disallowance of Rs. 2,26,740 made by AO. Before us, learned Departmental Representative for Revenue was not able to controvert factual observations made in order of CIT(A) on basis of which he sustained disallowance of Rs. 2,26,740 against Rs. 8,64,225 made by AO by deleting balance disallowance. He simply placed reliance on reasoning given in order of AO. Whereas, on other hand, learned Authorised Representative for assessee, placing k reliance on reasoning given in order of CIT(A), submitted that well reasoned and well discussed order does not call for any interference from our side. On considering submissions of both parties, we find that since detailed factual observations made in order of CIT(A), have not been controverted by any of parties, well reasoned and well discussed order of CIT(A) appears to be most fair and reasonable and it does not call for any interference from our side and accordingly same is upheld and ground No. 2 of appeal of Revenue is rejected. In result, appeal filed by Revenue is dismissed. *** ASSISTANT COMMISSIONER OF INCOME TAX v. PRAKASH DARYANI