Business expenditure deduction allowed for film exhibition celebration treated as genuine publicity expense tied to business purposes.

Expenditure incurred on a film exhibition's silver jubilee celebration was treated as deductible business outlay because it was incurred in the course of the assessee's film exhibition business and connected with sustaining collections and business publicity. The court applied the test that revenue scrutiny under section 10(2)(xv) of the Income-tax Act, 1922 is confined to the reality of the expenditure and whether it was laid out wholly and exclusively for business purposes. The reasonableness and commercial expediency of the spending were primarily for the assessee to judge. The expenditure was therefore held admissible and the disallowance was not justified.

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Issues: Whether expenditure incurred on the silver jubilee celebration of a film exhibition was allowable as a expenditure under section 10(2)(xv) of the Income-tax Act, 1922.

Analysis: The expenditure was incurred in the course of carrying on the business of exhibiting films and was connected with the continued exhibition of the picture. The celebration was treated as a publicity measure intended to sustain collections and advance the business. The revenue's enquiry under section 10(2)(xv) is confined to the reality of the expenditure and to whether it was laid out wholly and exclusively for the purpose of the business; the reasonableness or commercial expediency of the outlay is ordinarily for the assessee to judge.

Conclusion: The deduction was allowable and the disallowance was not permissible; the issue is answered in favour of the assessee.

Final Conclusion: The reference was answered by holding that the impugned expenditure qualified as admissible business expenditure.

Ratio Decidendi: Expenditure incurred in the course of business and laid out wholly and exclusively for that business is deductible if it is factually real and business-connected, and the revenue cannot substitute its own view on commercial expediency.

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