9911796707
TMI Blog2002 (9) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... nt for U.S.S.R. lines of vessels. The assessee filed his return of income for the assessment year 1983-84 with the relevant previous year ending March 31, 1983, and claimed deduction of a sum of Rs. 51,994 which represented the foreign travel expenses incurred for the assessee's wife who accompanied the assessee in his foreign trips to Singapore, Tokyo, Hong Kong, etc. The Income-tax Officer, while completing the assessment, disallowed the assessee's wife's foreign tour expenses for the reasons stated in the earlier assessment orders. On appeal, the Commissioner of Income-tax (Appeals), following its earlier orders, held that the assessee's wife had accompanied the assessee in his foreign tours and the assessee was a cardiac patient and it was necessary for the assessee's wife to accompany the assessee to look after him. The Commissioner of Income-tax (Appeals) allowed the appeal preferred by the assessee and deleted the addition made by the Income-tax Officer. The Revenue carried the matter in appeal to the Income-tax Appellate Tribunal and the Appellate Tribunal held that the expenses incurred in the foreign tours on the assessee's wife while she was accompanying the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earlier decisions in Aspinwall and Co. Ltd.'s case [1999] 235 ITR 106 and Appollo Tyres Ltd.'s case [1999] 237 ITR 706 referred to above and held that the expenditure incurred on the foreign tour by the assessee's wife was not an allowable expenditure. Mr. T. C. A. Ramanujam, learned counsel for the Revenue, on the other hand, submitted that the ratio of the decision of this court in T. S. Hajee Moosa and Co.'s case [1985] 153 ITR 422 would squarely apply to the facts of the case. We have carefully considered the submissions of learned counsel for the assessee and learned counsel for the Revenue. This court in T. S. Hajee Moosa and Co.'s case [1985] 153 ITR 422 has upheld the disallowance of expenditure on two grounds; (i) it was purely a personal expenditure; and (ii) there was a dual object in incurring the expenditure on the foreign tour of the assessee's wife. In so far as the disallowance of expenditure on the ground that it was the personal expenditure of the assessee is concerned, the following observation of the court is relevant: "The state of health of a person is not in any way related to the business activities carried on by him. A good businessman may be bad in he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... along with him on his foreign tour was only to serve or assist him and not for any business purposes, albeit there was also another object, namely, the furtherance or the promotion of the business of the assessee by the partner taking his wife along with him. Even in such a case, it would only be a dual purpose in respect of which the expenditure had been incurred. On a consideration of the principles laid down in the aforesaid decisions, it is difficult to support the conclusion that the expenditure in question was wholly and exclusively laid out for business purposes." In our view, the decision of this court in T. S. Hajee Moosa and Co.'s case [1985] 153 ITR 422 would squarely apply to the facts of the case. As far as the decision of this court in CIT v. Sundaram Clayton Ltd. [1999] 240 ITR 271, in which one of us was a party, is concerned, the decision is not applicable as the factual position was different and in that case, the expenditure incurred by the assessee was not on the spouse of its director on his business tour abroad, but the expenditure was incurred on the persons whom the assessee had invited having regard to the beneficial effect of their visit on the busines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iture is allowable or not would depend upon the facts of each case. It held that only after satisfying the condition that the travel was undertaken not for personal purpose, but wholly and exclusively for the purpose of the business, the amount would be allowable. The Kerala High Court held that that it would not endorse the view taken in the earlier case that whenever the wife of a director undertook a foreign tour along with the director, it should be presumed that the expenditure on the wife of the director was incurred wholly and exclusively for the purpose of the business. The Gauhati High Court in CIT v. George Williamson (Assam) Ltd. [1998] 234 ITR 130 held that the expenditure was allowable. The Gauhati High Court held that the finding of the Appellate Tribunal that the travel expenses incurred by the assessee for the two wives of the directors were allowable on the basis of the material available before it and the said finding was not challenged before the High Court and, hence, the decision of the Gauhati High Court in George Williamson (Assam) Ltd.'s case [1998] 234 ITR 130 does not assist the assessee. As far as the decision of the Madhya Pradesh High Court in CIT v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... outside the prohibition in section 130." The above speech was considered by the House of Lords in McKnight v. Sheppard [1999] 239 ITR 887 ; [1999] 3 All ER 491 ; [1999] 1 WLR 1333 and the House of Lords held as under : "If Lord Brightman's consultant had said that he had given no thought at all to the pleasures of sitting on the terrace with his friend and a bottle of Cotes de Provence, his evidence might well not have been credited. But that would not be inconsistent with a finding that the only object of the journey was to attend upon his patient and that personal pleasures, however welcome, were only the effects of a journey made for an exclusively professional purpose. This is the distinction which the special commissioner was making and in my opinion there is no inconsistency between his conclusion of law and his findings of fact." We are of the view that if the object of the foreign tour by the assessee's wife was to attend on the assessee and for his personal comforts, the expenditure would not qualify for deduction though the result of such expenditure may increase the efficiency of the assessee in attending to his business. However, where the object of the foreign to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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