Business deduction denied for directors' children's education costs where beneficiaries were treated as outsiders, not employees.

Educational on directors' children was held not deductible as business expenditure under section 37 because the beneficiaries had not joined the company in the relevant year and were treated on the facts as outsiders, being close relatives of the directors rather than employees or recipients under any company business scheme. The matter depended on accepted factual findings before the Assessing Officer and Tribunal, and no separate question of law was shown to arise, so the claim for deduction failed.

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Issues: Whether expenditure incurred on the education of the directors' children was allowable as business expenditure under section 37 of the Income-tax Act, 1961.

Analysis: The expenditure was examined in the context of the relevant assessment year and the factual finding that the beneficiaries had not joined the company during that year. The amounts were treated as having been spent on outsiders who were close relatives of the directors, rather than on employees or under any business scheme of the company. The matter turned on appreciation of facts already accepted by the Assessing Officer and the Tribunal, and no separate question of law was shown to arise.

Conclusion: The expenditure was not allowable as business expenditure under section 37, and the appeal failed.

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