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TMI Blog2002 (6) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... poses. We answer the question referred, against the assessee and in favour of the Department. - - - - - Dated:- 5-6-2002 - Judge(s) : V. P. MOHAN KUMAR., K. K. DENESAN. JUDGMENT The judgment of the court was delivered by K.K. DENESAN J.-The following question of law has been referred by the Income-tax Appellate Tribunal, Cochin Bench, at the instance of the assessee. "Whether, on the facts and circumstances of the case, the Tribunal was right in holding that the expenditure incurred on the foreign tour of a wife of the director of a company is not an allowable deduction under the Income-tax Act, 1961?" The assessee is a private limited company. In computing the total income for the assessment year 1987-88, the assessee claimed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ersonal expenses of the assessee), laid out or expended wholly and exclusively for the purposes of the business or profession shall be allowed in computing the income chargeable under the head "Profits and gains of business or profession." It is clear from the above provision that expenditure incurred for the travel of the wives of the directors will not qualify for deduction if the journey was undertaken not for business purposes. The section further says that it should be shown to be wholly and exclusively for the purposes of the business or profession and not for personal purposes. We find that the learned judges of the High Court of Madras as also of the Gujarat High Court have applied the law to the facts of the cases before them keepi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e were materials to show that the board of directors of the assessee-company had authorised the travel and medical expenses of the financial director and his wife on account of commercial expediency. The learned judges noticed that the Tribunal after perusing the relevant records produced by the assessee had found that the claim made was genuine and allowed the deduction. Having regard to the finding thus entered by the Tribunal, the learned judges of the Madhya Pradesh High Court sustained the claim for deduction under section 37(1) of the Income-tax Act. Learned counsel for the assessee has brought to our notice two decisions of this court reported in CIT v. Aspinwall and Co. Ltd. [1999] 235 ITR 106 and CIT v. Appollo Tyres Ltd. [1999] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he business. We, however, do not endorse the view that whenever the wife of the director of the company undertakes a foreign tour along with that director, it should be presumed that such foreign travel is wholly and exclusively for business purposes. Applying this principle to the facts of this case we do not think that any interference is called for, with the concurrent findings of fact arrived at by the assessing authority, the appellate authority and the Tribunal that no materials are available to establish that the expenditure incurred on the foreign tour of the wife of the director of the assessee-company was for its business purposes. We answer the question referred, against the assessee and in favour of the Department. - - TaxTMI ..... X X X X Extracts X X X X X X X X Extracts X X X X
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