Business expenditure for company car use cannot be disallowed for alleged personal use; any perquisite issue lies with the managing director.

Motor car expenses incurred by a company for its hotel business were held to be business expenditure, and the suggested personal use by the managing director did not justify a disallowance in the company's assessment. Any personal element, if taxable at all, would be assessable as a perquisite in the hands of the managing director rather than by reducing the company's business deduction. The disallowance was deleted.

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Issues: Whether the disallowance of a portion of motor car expenses on the ground of personal or non-business use was justified in the hands of a company.

Analysis: The company maintained the car for the conduct of its hotel business, and the expenditure was incurred in connection with that business. The suggested personal use by the managing director did not justify disallowance in the company's assessment, since any personal element, if relevant, would be assessable as a perquisite in the hands of the managing director rather than by reducing the company's business expenditure.

Conclusion: The disallowance of motor car expenses was not justified and was deleted.

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