Business expenditure deduction fails where the assessee cannot prove the underlying outlay was actually incurred for business purposes.

A deduction for a payment to a manager was claimed as business expenditure said to reimburse entertainment, presents and commission allegedly incurred to promote sales. The Court held that the assessee first had to prove that such expenditure was actually incurred for the asserted business purpose. The Tribunal's finding that there was no even indirect evidence of expenditure incurred on behalf of the company was a binding finding of fact. On that basis, the assessee failed to discharge the burden of proving a genuine business outlay, and the deduction was disallowed.

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Issues: Whether the amount of Rs. 26,288 paid to the manager was deductible in computing the assessee-company's profits as expenditure incurred wholly and exclusively for the purpose of business.

Analysis: The assessee relied on correspondence, a board resolution, and an agreement to contend that the payment was made to reimburse expenditure on entertainment, presents, and commission allegedly incurred to promote sales. The Court held that the initial factum of such expenditure having actually been incurred for the stated business purpose had to be proved by the assessee. The Tribunal's finding that there was not even indirect evidence of any expenditure incurred on behalf of the company was a finding of fact binding on the reference. On that basis, the assessee failed to discharge the burden of proving that the sum paid was a genuine business outlay.

Conclusion: The deduction was not allowable and the question was answered against the assessee.

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