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TMI Blog1987 (10) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the circumstances of the case, the assessee is entitled to claim as revenue expenditure the sum of Rs. 4,744 being part of expenditure incurred by Mr. A.M. Lal, chairman of the assessee-company, on account of his visit to foreign countries ? (3) Whether, on the facts and in the circumstances of the case, the assessee is entitled to claim as revenue expenditure the sum of Rs. 33,000 paid by way of fees to Incecon Consultants and to Mr. A. C. Das? (4) Whether, on the facts and in the circumstances of the case, the assessee is entitled to deduction of surtax payable under the Companies (Profits) Surtax Act as business expenditure under section 37 of the Income-tax Act, 1961, or alternatively as expenditure incidental to the carrying on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee failed. That is how the first question arises. During the accounting year relevant to the said assessment year, the chairman and managing director of the assessee, Mr. Lal, undertook foreign tour. He was accompanied by his wife. They spent a certain amount for purchase of tickets and a certain amount towards their staying expenses. The Income-tax Officer allowed the expenses incurred on purchasing tickets only for Mr. Lal but disallowed the expenditure incurred on tickets for Mrs. Lal. Further, out of a sum of Rs. 9,517 spent by Mr. Lal towards staying expenses, he disallowed 50% thereof on the ground that the said expenditure is attributable to a new business venture contemplated by the assessee. Of course, he disallowed the staying ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to show that it was necessary for the assessee-company to hold the shares in Molins of India Ltd.... In other words, the investment in the shares of Molins of India Ltd. is not incidental to the purpose of the business of the company and as such any expenditure incurred in connection with the sale of such investment can only be considered as capital in nature . . ." In view of the said finding, we are of the opinion that the Tribunal was right in holding that the brokerage paid in connection with the sale of such shares, held as investment and not as stock-in-trade, cannot be deducted as revenue expenditure. It will be capital in nature. Accordingly, the first question is answered in the negative, i.e., in favour of the Revenue and agains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deal. CIT v. Elecon Engineering Co. Ltd. [1981] 132 ITR 752 is a decision of the Gujarat High Court. The assessee, which was carrying on the business of manufacturing engineering equipment of various kinds, had sent one of its directors abroad for selection of some foreign engineers with a view to start the manufacture of aerial ropeways for transporting of machines as well as human beings. The expenses incurred in that connection were claimed as a deduction under section 37. It was disallowed by the Income-tax Officer and the Appellate Assistant Commissioner. On further appeal, however, the Tribunal found, on a consideration of the relevant facts and circumstances, that the assessee only wanted to utilise the existing resources in a mor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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