Employee food expenditure as wage perquisite was deductible; disallowance failed for want of proof and legal basis.

Food supplied to employees as part of the employment arrangement was treated as a workmen's perquisite forming part of wages, and the related expenditure was therefore deductible from business income. The disallowance was unsustainable because there was no categorical finding that the expenditure had not been incurred, and the partial allowance by the appellate authority showed the claim was not disbelieved. The amount claimed was also found not improbable on the facts, including its comparison with the allowance made in the succeeding year, so the deduction was allowed in favour of the assessee.

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Issues: Whether the expenditure incurred on supplying food to employees was a permissible deduction from the assessee's income for the assessment year 1973-74.

Analysis: The employees were found to have been supplied food as part of the employment arrangement, and the expenditure was treated as a workmen's perquisite forming part of wages. There was no categorical finding that the expenditure had not been incurred, and the partial allowance made by the appellate authority indicated that the claim was not disbelieved. On the facts, the amount claimed was not improbable, especially when compared with the allowance made in the succeeding year. The disallowance was held to be unsupported by any legal basis or finding that the expenditure was unproved.

Conclusion: The claim for deduction was allowable and the question was answered in favour of the assessee.

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