Business expenditure deduction for sports tournaments upheld where publicity value and employee amenity supported commercial expediency.

Expenditure on organising football and hockey tournaments was treated as business expenditure because the events generated continuous newspaper publicity, enhanced the assessee's commercial visibility, and provided employee recreation and participation benefits. Applying the principle that spending incurred on grounds of commercial expediency and for facilitating the carrying on of business may still be wholly and exclusively for business purposes, the claim satisfied the statutory test under section 10(2)(xv) of the Income-tax Act, 1922. The deduction was therefore allowable in favour of the assessee.

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Issues: Whether expenditure incurred by the assessee in organising football and hockey tournaments was allowable as a deduction under section 10(2)(xv) of the Income-tax Act, 1922.

Analysis: The expenditure was treated as business expenditure because the tournaments generated continuous publicity through newspaper reports, bringing the assessee's name into prominence and giving advertising value to the business. The holding of the tournaments was also found to provide recreation and participation opportunities for employees, which was regarded as an amenity supportive of the business. On the settled principle that expenditure incurred on grounds of commercial expediency and for facilitating the carrying on of business may still be wholly and exclusively for the purposes of business, the claim was held to satisfy the statutory test.

Conclusion: The expenditure was an allowable deduction under section 10(2)(xv) of the Income-tax Act, 1922, in favour of the assessee.

Ratio Decidendi: Expenditure incurred on tournaments that yields advertising value and serves a business purpose, including employee amenity, can qualify as being laid out wholly and exclusively for the purposes of business under section 10(2)(xv) of the Income-tax Act, 1922.

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