1978 (4) TMI 75

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....on which is common to all the six assessment years : " Whether, on the facts and in the circumstances of the case, the expenditure incurred by the assessee in organising football and hockey tournaments was an allowable deduction under s. 10(2)(xv) of the Indian I.T. Act, 1922 ? " The assessee-company, Messrs. Delhi Cloth & General Mills Co. Ltd., Delhi, owns a number of mills referred to as Delhi Cloth Mills Group (hereinafter referred to as " the D.C.M. group "). The company conducts annually All India hockey and football tournaments for which teams from various parts of the country are invited. The tournament is open to general public on payment. The assessee claimed a deduction of the expenses incurred for the conduct of the tourname....

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.... company. On appeals by the assessee, the AAC allowed the claim for deduction to the extent of Rs.20,000 only following his orders for the error years. On further appeal by the assessee, the Appellate Tribunal held that by holding the tournaments assessee gets publicity, that the headlines to the report in the newspapers about the tournaments go a, long was to make the company a household word, that it also provides opportunities to the employees of the mills to participate and also to witness such tournaments which is an amenity which was very necessary in modern hires, and that the holding of the tournament was thus very helpful to the business. In that view, the Tribunal allowed the deduction of the expenditure in each of the assesem....

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....t Ltd. [1940] 23 TC 707, 714 (KB)). It is also a settled principle that what is money wholly and exclusively laid out for the purpose of trade is a question which must be determined upon the principles of ordinary commercial trading (vide Robert Addie and Sons' Collieries Ltd. v. IRC [1924] 8 TC 671, 676 (C. Sess), and CIT v. Chandulal KeshavIal & Co. [1960] 38 ITR 601, 607, 610 (SC). Further, as held in Eastern Investments Ltd. v. CIT [1951] 20 ITR 1, 4 (SC), the party claiming the deduction need not show that any profit was in fact earned by the expenditure in question, and it is enough if the expenditure was incurred in the course of trade wholly and exclusively made for the purpose of the trade. Also, " a sum of money expended, not of ....