The conditions of service must enjoin, oblige, or direct a person like the assessee to spend out of his pocket wholly, necessarily, and exclusively in the performance of his duties for a deduction to be allowed under section 16(v) of the Income-tax Act, 1961.

ISMAIL J.

The assessee in this case after retirement was re-employed as the Director, Institute of Obstetrics and Gynaecology, Government Hospital for Women and Children, Madras. For the period September 18, 1967, to October 8, 1967, the assessee visited the Universities of Sydney, New South Wales, Melbourne and Adelaide, to observe the modern trends in training of postgraduates, research and fertility control as well as the treatment of cancer of the cervix and ovary. During this study tour the assessee incurred an expenditure of Rs. 8, 787 and claimed it as a deduction under section 16(v) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"). The Income-tax Officer came to the conclusion that the assessee was not required by the conditions of service to incur this expenditure and accordingly disallowed the claim. On appeal, the Appellate Assistant Commissioner held that the expenses incurred by the assessee for visiting the countries abroad cannot be said to have been made in the normal performance of his duties of employment and even the terms and conditions of G.O. Ms. No. 1557/PH dated October 4, 1967, did not compel the assessee to visit foreign countries so as to be considered as a condition of his service and in the circumstances the assessee's claim for deduction under section 16(v) could not be allowed. The assessee further went in appeal to the Tribunal. The Tribunal held that G.O. Ms. No. 1557/PH dated October 4, 1967, enjoined senior medical officers to go abroad to enable them to know the latest developments in their special fields and make use of that knowledge in the day to day work in hospitals by dissemination to their juniors and also by their own application in handling of patients. According to the Tribunal, the assessee undertook the foreign tour to study the latest trends and developments in his field of work and submitted a report to the Government as required under the G.O. referred to above. Hence, the Tribunal held that it was an integral part of the duty of the assessee to go abroad, study and observe the advances and latest developments in the specialised fields of obstetrics and gynaecology and study the methods of research work done in those fields so that the knowledge and experience gained may be disseminated to the juniors and apply this knowledge in handling the patients. The result was that the Tribunal allowed the claim of the assessee for deduction of the said amount under section 16(v) of the Act. It is the correctness of this conclusion of the Tribunal that is challenged in the present reference at the instance of the Additional Commissioner of Income-tax, Madras-II, in the form of the following question referred to this court under section 256(1) of the Act

"Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that the expenditure of Rs. 8, 787 incurred by the assessee on foreign tour should be allowed as an admissible deduction under section 16(v) of the Income-tax Act, 1961?"

The first thing to be considered is the language of section 16(v) of the Act. That section is as follows

"16. The income chargeable under the head 'Salaries' shall be computed after making the following deductions, namely:-

(v) any amount actually expended by the assessee, not being an amount expended on the purchase of books or other publications, or on entertainment or on the maintenance of a conveyance, which, by the conditions of his service, he is required to spend out of his remuneration wholly, necessarily and exclusively in the performance of his duties." *

Thus, it will be seen that the following requirements must be satisfied if a deduction can be allowed under the above provision

(1) The amount must be actually expended by the assessee

(2) The amount must be expended out of the remuneration of the assessee wholly, necessarily and exclusively in the performance of his duties

(3) The assessee must have been required to spend the