VADAMALAYAN P DR Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE assessee, a leading surgeon of Madurai with a lucrative practice, undertook a tour abroad in 1953, in the course of which he visited a number of hospitals and clinics in the United States of America and the United Kingdom, to study the latest technique in surgery and treatment. The tour cost him Rs. 19,538, the whole of which he claimed as deduction under S. 10(2)(xv) of the IT Act, in computing his assessable income in the asst. year 1954 -55. The ITO disallowed the claim in its entirety. He held that the expenditure was of a capital nature, incurred by the assessee to secure to himself a benefit of an enduring nature. The Asstt. CIT differed and found that no portion of the expenditure was of a capital nature. He, however, held that only one -half of the expenditure satisfied the test of having been wholly and exclusively incurred for the purpose of the assessee's profession. The other half was treated as the personal expenses of the assessee while abroad. The Asstt. CIT allowed a deduction of Rs. 9,769. The Department appealed to the Tribunal. The Tribunal agreed with the ITO that the expenditure of Rs. 9,769 was of a capital nature, but did not disturb the finding of the Asstt. CIT, that half of the expenditure incurred by the assessee did satisfy the other requirement of S. 10(2)(xv), that it had been incurred wholly and exclusively for the purposes of the assessee's profession.

(2.) THE Tribunal recorded in its order on appeal:

(3.) WE do not propose to embark upon the task eminent Judges in England and India have declined consistently to undertake. We shall not attempt to evolve a formula, infallible and of universal application, to decide what marks off revenue from capital expenditure either for a profession or for a business. The dividing line in some cases may be thin, but it is a clear and perceptible one. Courts have always addressed themselves to the comparatively less difficult task of deciding whether a given item of expenditure falls on one side or the other of that dividing line. We need not embark either on a review afresh of the case -law on the subject, when practically nothing new can be added. The case -law was reviewed at length by the Supreme Court in Assam Bengal Cement Co. Ltd. vs. CIT (1955) 27 ITR 34 (SC) : TC16R.841.