Business expenditure deduction fails where insurance premium lacks a direct nexus to the trader's business purpose.

Deductibility of insurance premium under section 10(2)(xv) depended on whether the payment was laid out wholly and exclusively for the business in the assessee's character as a trader. The court found no material showing that the insured director's services were indispensable, that he possessed any special business qualification, or that trade practice supported such expenditure. The nexus between the premium and the business purpose was too remote, so the premium was not an allowable business deduction.

---

---

Issues: Whether the premium paid under the insurance policy was deductible as business expenditure under section 10(2)(xv) of the Indian Income-tax Act, 1922.

Analysis: Deductibility under section 10(2)(xv) depended on whether the expenditure was laid out wholly and exclusively for the purpose of the business and in the assessee's character as a trader. The material did not establish that the insured director's services were indispensable, that he had any exceptional qualification relevant to the business, or that there was any trade practice supporting such expenditure. The connection between the payment of premium and the business was therefore too remote, and no direct nexus with the business purpose was shown.

Conclusion: The premium was not an allowable deduction under section 10(2)(xv), and the answer to the question was against the assessee and in favour of the Revenue.

---