1965 (9) TMI 64 - HC - Income Tax

Summary

Issues Involved:
1. Whether the expenditure incurred by the assessee during his foreign tour can be said to have been done wholly and exclusively for the purpose of his business, profession, or vocation under section 10(2)(xv) of the Indian Income-tax Act, 1922.

Issue-wise Detailed Analysis:

1. Nature of Expenditure Incurred:
The primary issue revolves around whether the sum of Rs. 10,483 incurred by the assessee during his foreign tour qualifies as an allowable expenditure under section 10(2)(xv) of the Indian Income-tax Act, 1922. The assessee, an astrologer, claimed this expenditure as business-related, arguing that his trip to the U.S. and U.K. was for professional purposes, including attending the International Congress of Astro-Scientists and delivering lectures.

2. Tribunal's Approach:
The Tribunal's approach was scrutinized for its correctness. The Tribunal examined whether the expenditure was in any way unconnected with the profession or vocation of the assessee. However, the court emphasized that the correct approach should have been to determine whether the expenditure was incurred wholly and exclusively for the purpose of the assessee's business, profession, or vocation.

3. Purpose of the Foreign Tour:
The court found that the primary purpose of the assessee's trip was to attend the Congress of Astro-Scientists in the U.S. as the executive 2nd vice-president. The incidental activities, such as delivering lectures and gaining knowledge, were secondary and not the primary purpose of the trip. The court noted that incidental advantages gained do not satisfy the requirements of section 10(2)(xv).

4. Interpretation of "Wholly and Exclusively":
The court referred to the interpretation of similar provisions in the English Income Tax Act and emphasized that the purpose of the expenditure must be solely for business, professional, or vocational purposes. If the expenditure serves dual purposes, it does not qualify for deduction under section 10(2)(xv).

5. Precedents and Comparisons:
Several precedents were considered, including:
- Bentleys, Stokes and Lowless v. Beeson (Inspector of Taxes): Highlighted the need for the expenditure to be solely for business purposes.
- Bowden (Inspector of Taxes) v. Russell and Russell: Demonstrated that dual purposes (business and personal) disqualify the expenditure from being deductible.
- Dr. P. Vadamalayan v. Commissioner of Income-tax: Distinguished from the present case as the primary purpose of the expenditure was for professional advancement, unlike the assessee's primary purpose of attending a congress.

6. Conclusion:
The court concluded that the expenditure incurred by the assessee was not wholly and exclusively for the purpose of his business, profession, or vocation. The primary purpose was to attend the congress, and any professional benefits gained were incidental. Therefore, the sum of Rs. 10,483 was not an allowable expenditure under section 10(2)(xv) of the Act.

Judgment:
The court answered the question of law in the negative, stating that the sum of Rs. 10,483 is not an allowable expenditure under section 10(2)(xv) of the Indian Income-tax Act, 1922. The assessee was ordered to pay the costs of the reference, with an advocate's fee of Rs. 250.