Business expenditure deduction upheld for film artistes' festival travel where attendance supported film promotion and commercial expediency.

Air ticket expenses for two cine artistes attending the Tashkent Film Festival were treated as deductible business expenditure because the assessee, a film producer, showed that the films were exhibited at the festival and that the artistes' attendance had a direct business nexus. The expenditure was regarded as commercially expedient in promoting the exploitation and enhancement of the value of the films. An invitation to one artiste, and a similar invitation to the other, supported the conclusion that the travel was incurred wholly and exclusively for business purposes. The disallowance was therefore deleted.

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Issues: Whether the air ticket expenses incurred for two cine artistes to attend the Tashkent Film Festival were allowable as expenditure laid out wholly and exclusively for the business purposes of the assessee.

Analysis: The assessee was a film producer and the films produced by it were shown at the festival. The attendance of artistes at a prestigious international film event was treated as connected with the exploitation and enhancement of the value of the films. The existence of an invitation in respect of one artiste, and the finding that a similar invitation was sent to the other, supported the business nexus of the expenditure. The expenditure was therefore regarded as commercially expedient and incurred in the course of the assessee's business.

Conclusion: The expenditure was allowable as business expenditure and the disallowance was rightly deleted. The appeal failed.

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