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TMI Blog1965 (9) TMI 64X X X X Extracts X X X X X X X X Extracts X X X X ..... -Scientists - is very important first as our executive 2nd Vice President and further as top ranking representative of India as a Nation with strong interest in co-operative understanding among the peoples of the world. As vice-president he had to attend this session. On his way to New York, he attended the 6th Congress of Scientific Integration at Italy. While the U. S. he delivered many lectures before the astrological associations and guilds. He also visited United Kingdom where also he gave lectures before such profession associations. The expenses within U. S. and U. K. were wholly or partly borne by the association and guilds. The total expenses incurred by the assessee amounted to ₹ 11,808 as under : Payment to travel agents for booking passage ₹ 9,793 Lodging, boarding and other expenses ₹ 1,690 The whole of the above was claimed as an expenditure under section 10(2) (xv) for the following reasons : (1) The assessee was interested in making the American audience interested in Hindu Astrology of which the assessee is a leading exponent; (2) The assessee studied the system and methods adopted in U. S. A. of design, editing and metho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee and the executive director of the Congress, he pointed out that the visit abroad was required as an office bearer of the International Congress and the proposed lecture tour was more for explaining the general cultural background and present day problems of our country than with any specific reference to any particular problems in astrology. 8. He then referred to the argument of the assessee's representative that the various lectures given by the assessee had a beneficial effect in the circulation of the assessee's magazine and held that the lectures were not the primary purpose of the assessee's visit and these had been arranged to reduce the cost of the visit and that the possible effect of these lectures was far too remote a factor to be considered as relevant. 9. He dismissed another argument of the assessee's representative as too frivolous. This argument was that the purpose of the visit was to improve the technique of magazine publication. 10. In the end, he held that the expenditure was not for the purpose of the profession of business and confirmed the Income-tax Officer's disallowance. A copy of the order of the Appellate Assistant C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... what is stated in the negative form in the English statute, is substantially in 'pari materia' with the English enactment. The requirements of section 10(2) (xv) are that expenditure for which deduction is claimed : (i) should not be an allowance of the nature described in clauses (i) to (xiv) of section 10. (ii) it should not be in the nature of capital expenditure. (iii) it should not be in the nature of personal expenses of the assessee. (iv) it should have been laid out or expended wholly and exclusively for the purpose of such business, profession or vocation. 13. The last item covers both the laying out of money for the business, profession or vocation or expending of the same wholly and exclusively for the purpose of such business, profession or vocation. The word wholly refers to the money expended and the expression exclusively refers to the purpose for which it is expended. 14. In the instant case we are called upon to consider 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. On the facts of this case, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce-president and further as top ranking representative of India as a Nation with strong interest in the co-operative understanding among the peoples of the world. 18. It is not the case of the assessee that he attended the conference either for the purpose of gaining additional knowledge in astrology or for propagating his knowledge on the subject or even to improve the prospects of the magazine published by him. He primarily went to the U. S. A. for the purpose of attending the congress. After going there, he took advantage of his stay in the U. S. A. and delivered certain lectures on astrology. It may also be that during his stay in the U. S. A. and in other countries, through which he travelled, he took the opportunity to know the advances made by astrology in those countries. But that is not the same thing as saying that his purpose in going to the U. S. A. was for advancing his knowledge on astrology or in connection with the publication of his magazine. What section 10(2) (xv) requires is that the expenditure, the deduction of which is claimed, should have been wholly and exclusively expended for the purpose of business, profession or vocation. The purpose in expending th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... end or stranger or of supporting a charitable or benevolent object, then the paragraph is not satisfied though in the mind of the actor the business motive may predominate. For the statute so prescribes. Per contra, if, in truth, the sole object is business activity necessarily involves some other result, or the attainment or furtherance of some other objective, since the latter result or objective is necessarily inherent in the act. 20. Therefore, in deciding whether a given expenditure was incurred exclusively for a business, professional or vocational purpose, we have to see the object with which that expenditure was incurred. So viewed, there can be hardly any doubt that in this case the expenditure was primarily incurred for the purpose of going over to the U. S. A. for attending the conference. The prospect of business benefit, if any, could not have been in the mind of the assessee at the time the expenditure was incurred. 21. The decision of the Chancery Division in Bowden (Inspector of Taxes) v. Russell and Russell is of some assistance to us. Facts of that case are : Under arrangements made by the Law Society in London, a practicing solicitor visited America and Ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wed the expenditure incurred by the wife of the director of a company who had accompanied her husband who had visited Australia for the purpose of acquiring knowledge in connection with his business. The ratio of that decision does not bear on the point under consideration. 24. We do not also think that the rule laid down by the Supreme Court in Commissioner of Income-tax v. Malayalam Plantations Ltd. read to us by the learned counsel for the revenue has any application to the facts of the present case. Therein the court was considering the true scope of the expression for the purpose of the business . It held that that expression is wider in scope than the expression for the purpose of earning profits . 25. Mr. V. Krishna Murthy, the learned counsel for the assessee, relied on several decisions in support of his contention that the present case falls within the scope of section 10(2) (xv). We shall now proceed to consider those decisions. 26. The first decision cited by Mr. Krishna Murthy is Seshasayee Brothers Ltd. v. Commissioner of Income-tax. Therein a director of the assessee company was deputed by the company managed by it to attend a conference of medical manufac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner of Income-tax v. Royal Calcutta Turf Club. The facts of that case were these : The Royal Calcutta Turf Club was an association of persons whose business it was to hold race meetings on a commercial basis. The turf club itself did not own any horse or employ jockeys. As it was of option that there was a risk of jockeys becoming unavailable and that such unavailability would seriously affect its business, the turf club established in 1948 a school for the training of Indian boys as jockeys. During the year ended March 31, 1949, the turf club spent a sum of ₹ 62,818 on the running of the school and claimed that amount as a deduction under section 10(2) (xv) of the Income-tax Act. The court held that the amount spend by the turf club was not in the nature of capital expenses because no asset of an enduring nature was created thereby. If further held that as the amount was spent for the preservation of its business it was laid out wholly and exclusively for the purpose of the business of the turf club and was an allowable deduction under section 10(2) (xv) of the Income-tax Act. 29. In so deciding, it came to the conclusion as was done in Commissioner of Income-t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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