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TMI Blog1984 (6) TMI 118X X X X Extracts X X X X X X X X Extracts X X X X ..... 80 to 23-8-1980 and also for the 18th Conference of the International Bar Association held at Berlin from 24-8-1980 to 30-8-1980. He further participated in the study tour, sponsored by the Bar Council of India, and visited the Bar Associations at Copenhagen, French Bar Associations and Law Association at London. While the assessee was in London, visits were made to lower Courts, the House of Lords and to the Privy Council. 5. The assessee had deposited Rs. 16,400 and Rs. 15,000 aggregating to Rs. 31,400 in the accounting period with the Bar Council of India towards defraying the expenses for his foreign tour. There was a further final payment of Rs. 1,312 on 20-3-1982, Shri Satyanarayana Peeti, who appeared for the assessee, conceded that an amount of Rs. 2,975 (350 dollars at Rs. 8.50 per dollar) was incurred as personal expenses and to that extent there may be a disallowance and the rest of Rs. 28,425 should be allowed in this assessment year as expenditure laid out fully and completely for the purpose of his profession. 6. The assessee claimed before the ITO that the foreign tour undertaken by him at the instance of Bar Council of India was highly beneficial and educative f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... him that the tour was highly beneficial and educative as the assessee was able to have the views of lawyers of the other countries about the profession in such countries and also could keep himself aware of the developments in the legal fields in other countries. For this purpose, it was stated that the tour was undertaken by him to gain professional experience. The letters of the assessee addressed to the ITO on 6-1-1983, 13-1-1983 and 22-1-1983 explaining as to how he was benefited by the conferences as well as visits to France and UK were brought to the notice of the AAC. So also, the booklets published containing the programme of the conferences, which the assessee attended as a sponsored delegate of the Bar Council of India, were also furnished for the perusal of the AAC. A submission was made that it was not necessary that such tour should have something to do immediately with the actual work performed by the assessee in the course of his professional activities in India, but the matter must be viewed in a broader perspective. The expenditure would be an allowable expenditure, according to the assessee, even if the exposure at the conferences really helped the assessee to fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... annot but help expressing our gratitude to both of them for their elaborate and elucidating arguments on every conceivable point which may arise for decision and the thorough research which they have made over the subject. 13. The principal question which is to be decided in this case is whether the expenditure on foreign tour is laid out or expended wholly and exclusively for the purposes of profession carried on by the assessee in India. In CIT v. Malayalam Plantations Ltd. [1964] 53 ITR 140 (SC), Subba Rao, J. (as he then was) speaking for the Supreme Court said : ". . . Its range is wide : it may take in not only the day to day running of a business but also the rationalisation of its administration and modernisation of its machinery ; it may include measures for the preservation of the business and for the protection of its assets and property from expropriation, coercive process or assertion of hostile title ; it may also comprehend payment of statutory dues and taxes imposed as a precondition to commence or for carrying on of a business ; it may comprehend many other acts incidental to the carrying on of business. However wide the meaning of the expression may be, its li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is concerned very much with the Company Law, the Indian Contract Act, 1872, the Transfer of Property Act, 1882, the Negotiable Instruments Act, other civil laws as well as labour laws. The 59th conference of the International Law Association was held from 17-8-1980 to 23-8-1980 at Belgrade. A copy of the professional programme of the said conference as provided to us gives a list of subjects which were discussed at the conference. They include International Monetary Law, Conservation of Environment, Collisions at Sea, International Commercial Arbitration, etc. The organising committee of the conference in the foreword states as follows : " The 59th ILA Conference in Belgrade will deal with the legal aspects of a new International Economic Order as well as numerous current issues in International Law, with reports from all the ILA international committees. On their part, Yugoslav lawyers will do their best, through the work of their national committees and traditional Yugoslav hospitality, to ensure the success of the conference to the satisfaction of every participant." Therefore, from the above it would be seen that the conference is of international character and the ITO is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. Here it will be necessary for the Indian lawyer to know enough foreign law to discuss the problems intelligently with foreign counsel and to give him appropriate instruction. Finally, in cases of first impression where a similar issue has been decided abroad, reference to foreign law may be helpful to the lawyer in winning his case." The above strengthens our conclusion differing from that of the lower authorities and makes it clear that the impression of the lower authorities that knowledge of comparative law of other countries is quite useless to the assessee and does not help him at all in his practice in India cannot be accepted as correct. 16. The 18th conference of the International Bar Association was held at Berlin, West Germany, from 24-8-1980 to 30-8-1980. It is said that for this conference and that already referred to 40 chief justices, 140 judges, 300 professors of law and 2,600 lawyers from all over the world attended and participated in the deliberations either in committees of the sections or otherwise. The then President of the International Bar Association, Mr. E. Neil Mckelvey, stated in the foreword in the leaflet containing programme of International Bar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... say that there was ample scope for the assessee to know the current legal trends apart from the general law in the very subjects in which he is practising and also to keep abreast with the latest law on those and other subjects. 17. In the letter which the assessee addressed to the ITO on 22-1-1983 he categorically stated that he gained knowledge of the new legal trends relating to the civil procedure, criminal procedure, labour law, constitutional reforms, corporate company law, professional ethics, modern scientific equipment and technique for a lawyer's office. He further stated that all this made him efficient in his profession and enabled him to handle complicated matters. He further stated the necessity for an advocate to keep abreast of the latest developments in law and he also intimated that the conferences which he had attended played significant role in developing the lawyer's mind and which is reflected in his day to day practice. Before he was sent as a delegate of the Bar Council of India, the Chairman of the Bar Council of India wrote a letter dated 8-7-1980 to the assessee wherein he welcomed him as a member of the delegation of his institute to International Con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ks ; it lives with the profession. Judges dressed with their brief authority may seem to speak more finally, but it is only for the moment. In the end, they take their cues from the bar, for, it is the bar which makes the statutes and fabricates the adjustments which they express. It is also the bar which gives new shape and meaning to the words of a statute and puts flesh and blood in their dry bones." [Emphasis supplied] He also stated that used as an instrument of social engineering, law can introduce smoothness in the act of change, prevent upheavals and eliminate jolts in the onward march of society. 20. Justice Krishna Iyer in his book Law, Society and Collective Consciousness visualised the role of the lawyer in the society as a public functionary and his equipment and skill should, according to him, include the following : " The lawyer is a public functionary and the demand based on professions for the people and ' the politics of skill ' apply to him, too. Mr. Justice Bhagwati and I, in separate committees and together, have spelt out some proposals for lawyer reform. If we assent to the role of the lawyer as the engineer of justice under the law, his horizon must wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iscussed in the above conferences, the other topics discussed were laws of other countries rather than of India is not acceptable. For instance, in the business law committee or general practice committee formed at the conference of the International Bar Association in Berlin at West Germany, Indian delegates also could read papers on all subjects including, for instance, on Estate and Tax Planning, Criminal Law, Real Property, Labour law, Investment Companies, Funds and Trusts, Commercial Banking, etc. So also, there was ample scope for the Indian delegation to hear from foreign delegates their views on the same subjects presented in the form of papers discussed in the form of workshops, etc. They also got the benefit of exchanging the views personally with each other. 23. Article 217(2) of the Constitution of India prescribes as one qualification for appointment as a Judge of a High Court a minimum of 10 years experience as an advocate of one or more High Courts. Article 124(3)(b) of the Constitution of India prescribes a similar qualification which would enable a suitable advocate to be considered for appointment as a Judge of the Supreme Court of India. It is manifest from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing himself abreast of the latest techniques of his business is not a capital expenditure. The sum of Rs. 5,160 which the assessee had incurred in the foreign tour was an expenditure incurred wholly and exclusively for his business and held that it is rightfully allowed as a business expenditure. While allowing the said expenditure as allowable business expenditure his Lordship laid down the following tests as criteria : " The test to find out whether a particular expenditure is wholly or partly justified or exclusively incurred for the purpose of business is not to see whether it was necessary, nor would it be proper to see whether any other person similarly situated would have thought it reasonable to incur expenditure to that extent. The true test is to find out whether the businessman, when he expended the money, was acting reasonably in the interests of his own business uninfluenced by any irrelevant and extraneous considerations." The ratio of this decision was followed by the Delhi High Court in CIT v. Dr. P.N. Beh [1972] 84 ITR 125. The assessee in that case was a medical practitioner and a dermatologists. He went to Stockholm for a week to attend the International Cong ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... radictory. In Dr. B.V. Raman's case, the primary object of going on foreign tour was taken to be attending conference at New York and, learning the advancement of astrology in countries the assessee visited, was taken to be of secondary benefit which he derived while on tour. Applying the same tests to the facts on hand, we may note that the assessee is not a member of Bar Council of India. He was not obliged to go and attend either the International Law Association or International Bar Association Conferences. He was chosen as a delegate by Indian Bar Association to represent it at those conferences. We consider that the assessee as a practising advocate was actuated only with the desire to equip himself with new trends or advancements in law and thereby widen his horizon while he attended the conferences. Therefore, the primary purpose of the foreign tour of the assessee in this case was only to gain more knowledge and education and to equip himself in finer points of law in the fields in which he is practising with a view to handle his cases more efficiently and successfully than before as well as for fulfilling the true role expected of an advocate. From the foregoing, we are d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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