Business-purpose expenditure cannot be reduced on subjective reasonableness once accepted as allowable under the deduction provision.

Under section 10(2)(ix) of the Burma Income-tax Act, deductibility depends on whether the expenditure was genuinely incurred solely to earn business profits. The taxing authority may examine bona fides, genuineness, surrounding circumstances, and whether the claim is truly for business purposes at the stage of allowance, but once that threshold is met it cannot scale down the deduction on a subjective view of reasonableness or excessiveness. The provision contains no implied power to refix the allowable amount on that basis, particularly where reasonableness is expressly provided for elsewhere in the Act.

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Issues: Whether, after accepting that an expenditure is incurred solely for the purpose of earning business profits and is admissible under section 10(2)(ix) of the Burma Income-tax Act, the taxing authority can nevertheless reduce or refix the amount on a subjective standard of reasonableness.

Analysis: The admissibility of expenditure under section 10(2)(ix) turns first on whether the item was in truth incurred solely for the purpose of earning business profits. While the taxing authority may examine bona fides, genuineness, surrounding circumstances, and whether the claim is really for business purposes, that inquiry operates only at the stage of deciding whether the item falls within the statutory allowance. Once the authority has accepted that the expenditure is permissible within the scope of the provision, there is no further power to substitute its own view of what is reasonable and to scale down the amount merely because it appears excessive. That power is absent from section 10(2)(ix), especially when the statute elsewhere expressly provides for reasonableness in a different clause.

Conclusion: The taxing authority cannot, after accepting the expenditure as allowable under section 10(2)(ix), disallow part of it or reduce it on a subjective test of reasonableness. The answer is in the negative and is in favour of the assessee.

Ratio Decidendi: Where a taxing provision allows deduction of expenditure incurred solely for business purposes without expressly authorising a reasonableness test, the authority may examine genuineness and business purpose, but cannot refix the allowable amount on its own subjective view of adequacy or reasonableness once the expenditure is accepted as falling within the provision.

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