1970 (9) TMI 10 - HC - Income Tax

Expenses incurred by a surgeon on tour of foreign country - wholly and exclusively for the purpose of assessee s profession - deduction allowed u/s 10(2)(xv)

Summary

Issues:
1. Whether expenditure incurred on a foreign tour by an ophthalmic surgeon is an admissible deduction while computing total income.

Analysis:
The judgment pertains to a case where the assessee, an ophthalmic surgeon, claimed a deduction of Rs. 10,079 spent on a foreign tour for professional purposes during the assessment year 1962-63. The Income-tax Officer disallowed the claim entirely, stating that the knowledge gained was of enduring benefit and partly on personal account. The Appellate Assistant Commissioner allowed only a partial deduction, attributing part of the expenditure to personal use. The Tribunal found that the main purpose of the expenditure was professional development, rejecting the apportionment done by the Appellate Assistant Commissioner. It allowed a deduction of Rs. 6,979, considering the expenditure as allowable under section 10(2)(xv) of the Income-tax Act, 1922.

The Tribunal's decision was challenged, arguing that the expenditure was capital or personal in nature. The court relied on precedents to support the view that the expenditure was allowable under section 10(2)(xv) and not of capital or personal nature. The court distinguished cases where expenditure was deemed capital due to enduring benefits or machinery purchase, emphasizing the professional development aspect in the present case. The court upheld the Tribunal's finding that the expenditure was allowable under section 10(2)(xv) and not capital or personal expenses.

Regarding a specific deduction of Rs. 2,519 disallowed by the Appellate Assistant Commissioner, it was contended that it did not fall under the deductions permissible under section 7 for salaries. The court noted that the deduction was mainly allowed under section 10(2)(xv) and held that the question of apportioning expenses for a study tour abroad by a salaried employee was a mixed question of fact and law. The court affirmed the Tribunal's decision based on section 10(2)(xv) and held that reference to section 7 was incidental.

In conclusion, the court held that the expenditure on the foreign tour was an admissible deduction under section 10(2)(xv) and affirmed the Tribunal's decision. The court answered the question in the affirmative, allowing the assessee's claim for deduction and awarding costs of the reference to the assessee.