TMI Blog1986 (4) TMI 94X X X X Extracts X X X X X X X X Extracts X X X X ..... d deduction under s. 35B on the expenditure of Rs. 25,090 incurred by Mrs Khanna, wife of the senior partner of the assessee firm on foreign travel." 2. The respondent in this case is a reputed firm of Chartered Accountants having offices at Bombay, Calcutta, Madras, and New Delhi. The firm also represents in India an internationally renowned accounting firm, viz., M/s Peat marwick Mitchell Co. The aforesaid international accounting firm has associates in countries all over the world. As a result of its association with M/s Peat Marwick Mitchell Co. the respondent receives substantial amount of professional work in the form of clients, educational facilities, literature and training of their staff from this foreign firm. 3. The se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss of the firm, the expenditure could not be allowed. He also held that nexus between the expenditure for the partner's wife to attend a highly specialised Chartered Accountant's conference and further travel to Europe to meet the clients of the firm in which her husband was a partner, had not been established. 5. The matter went up in appeal before the CIT(A) and it was urged on behalf of the respondent firm as under: (i) That senior partners of this firm had been invited from time to time in the meetings outside India of the various associates of the international firm whom they represented in in India. (ii) The presence of the wives makes the social contracts easier and this leads to a lot of advantage in the business of the fir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held from time to time and it was customary that the wives of the partners should also accompany them. He further drew our attention to the fact that a similar trip was undertaken by the senior partner Mr. R.C. Khanna and his wife in May, 1979, and the aforesaid expenditure was allowed as a deduction by the Department. This statement at the bar was not challenged by the Departmental Representative. The ld. counsel further submitted that the firm is earning substantial amount by way of foreign exchange as a result of its association with the internationally acclaimed accounting firm. According to him, it is common practice in foreign countries to invite wives to business conference where substantial amount of socialising is done by way of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m other parts of the world along with their wives. The technical meetings at the aforesaid conferences have also been followed by social gatherings where the wives of the various participants have also joined in. At such social gatherings personal contacts built up earlier have been further strengthened leading to a further cementing of professional relationships. 9. In order to claim a deduction it is enough to show that the money is expended not of necessity and with a view to direct and immediate benefit but voluntarily and on grounds of commercial expediency and in order to indirectly facilitate carrying on of the business. In considering whether an item is deductible the matter has to be looked at from the point of view of the payer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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