The main legal point established in the judgment is that for an expenditure to be allowable under section 10(2)(xv) of the Indian Income Tax Act, it must be incurred wholly and exclusively for the purpose of the business, profession, or vocation, and any incidental advantages gained are not considered.

Hegde, J.—This is a reference under section 66(1) of the Indian Income Tax Act, 1922, to be hereinafter referred to as the "Act". The question of law referred to by the Income Tax Appellate Tribunal, Madras Bench, to this court for its opinion is : "Whether on the facts and in the circumstances of the case the sum of Rs. 10,483.00 is an allowable expenditure under section 10 (2) (xv) of the Indian Income Tax Act, 1922.

[The learned judge set out the statement of case which ran as follows :]

2. The assessee is an astrologer by profession. He carries on business in the printing and publishing of books on astrology. He also runs an astrological magazine. In March, 1959, he was elected as the Second Vice President of the International Congress of Astro scientists. A session of the Congress was held in New York between 2nd and 10th October, 1959. The conference director wrote to the assessee :

"Your attendance at New York this coming October 2nd to 10th - at the World Congress of Astro scientists - is very important first as our executive 2nd Vice President and further as top ranking representative of India as a Nation with strong interest in co-operative understanding among the peoples of the world."

As vice-president he had to attend this session. On his way to New York, he attended the 6th Congress of Scientific Integration at Italy. While the U. S. he delivered many lectures before the astrological associations and guilds. He also visited United Kingdom where also he gave lectures before such profession associations. The expenses within U. S. and U. K. were wholly or partly borne by the association and guilds. The total expenses incurred by the assessee amounted to Rs. 11,808 as under :

Rs.

Payment to travel agents for booking passage

9,793

Lodging, boarding and other expenses

1,690

Watches and radio

325

The whole of the above was claimed as an expenditure under section 10(2) (xv) for the following reasons :

"(1) The assessee was interested in making the American audience interested in Hindu Astrology of which the assessee is a leading exponent;

(2) The assessee studied the system and methods adopted in U. S. A. of design, editing and methods and some of these have been introduced in the assessee's magazine to suit foreign tastes.

3. The Income Tax Officer considered that Rs. 1,000 out of Rs. 1,690 and Rs. 325 as expenditure of a personal nature. As to the balance of Rs. 10,483 he considered that it was not an expenditure laid out wholly and exclusively for the purpose of assessee's business. He observed that the necessity for the trip abroad arose on account of the assessee having been elected as an executive of the World Congress of Astro scientists. In this connection, he referred to the letter of the Conference Director, which we had quoted earlier. He also considered that the assessee's efforts in kindling abroad an abiding interest in Hindu Astrology and the magazine had created the "American goodwill" which was a capital asset.

4. He rejected also another argument of the assessee's representative which was to the effect that as the exchange control regulations did not permit pleasure trips abroad, the expenditure claimed by the assessee should be deemed to be an expenditure on a business trip. The Income Tax Officer to the letter of the State Bank of India to Reserve Bank which recommended an allocation of foreign exchange to the assessee. The letter is dated June 5, 1959, and the relevant portion was as under :

"After attending the Congress Sri Raman proposes to visit the U. K. and the Continent of Europe on a lecture tour with a view to maintaining contact with the best exponents of the subject in those countries and to popularise our system. The mission is purely cultural and educational."

The Income Tax Officer concluded from the above that the trip was not a business trip.

5. The assessee relied on the decision of the Madras High Court in Dr. P. Vadamalayan v. Commissioner of Income Tax. The Income Tax Officer disti