1975 (10) TMI 3

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..... his international women's year, we reluctantly feel inclined to reject this reference in the matter of disallowance of the foreign tour expenses of the wife of the managing director of the assessee-company for obvious reasons. The assessee herein is a private limited company. The relevant assessment years are 1960-61 to 1964-65. In the accounting year S.Y. 2016 which commenced on November 1, 1959 .....

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..... nditure as business expenditure. The ITO disallowed the expenditure to the extent of Rs. 9,579 incurred for the tour of Kokilaben. The assessee-company carried the matter in appeal before the AAC who, however, agreed with the contention of the assessee-company and held that Kokilaben, being a Hindu wife, would not ordinarily go to place like Japan unless it was for a very good reason. The AAC foun .....

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..... s of Rs. 9,579 could not have been said to have been incurred for the business of the assessee-company. At the instance of the assessee, therefore, the following question has been referred to us for our opinion : " Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in disallowing the foreign tour expenditure of Rs. 9,579 incurred for Smt. Kokilaben P. Sh .....

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..... respect of the tour of Kokilaben should be allowed as business expenses since there is no distinction in principle in the real nature of the expenses. We are sure that tax collectors do not want to discourage business executives and managing directors from undertaking foreign tours for business purposes nor to deprive them of the company of their wives in such tours, but for that we do not think .....

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..... ." In our opinion, the need of the managing director of the assessee company to have the services of his wife who was not a qualified or trained nurse either to attend on him for his indifferent health or to prepare food for him since he happened to be a strict vegetarian would not entitle the assessee-company to claim the proportionate expenses as business expenses. The result is that we answer .....

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