FACTS :- The following questions were referred to the High Court.

Whether on a true construction of S. 10(2)(xii) of the Act and in the circumstances of the case the applicants are entitled to a deduction of the entire amount of Rs. 12,000 paid by them to Jamnadas Yallabhdas and Purshottam Manmohandas the two employees ?

Whether on a true construction S.12 read with R. 1 of Sch. 1, Excess Profits Tax Act, the Excess Profits Tax Officer was bound to obtain the prior authority of the Commissioner of Excess Profits Tax before disallowing the applicants the balance of the sum of Rs. 11,000 out of the total amount of Rs. 12,000 by the applicants ?

The facts leading to these questions will be found in the judgment of the High Court.

Chagla, C.J. :- The question that arises on this reference is whether a certain amount paid by an employer to his employees is a valid deduction under S. 10(2)(xv), Income-tax Act, 1922, and in order to determine it we have got to consider whether it is an expenditure laid out or expended wholly and exclusively for the purpose of the business of the assessee. The assessee employed two persona by the name of Jamnadas and Purshottamdaa to attend to a branc