1. This appeal has been filed by the assessee against the order dated 19-4-1982 of the AAC.2. The assessee is an individual, deriving income from profession as a chartered accountant. The assessment year involved in this appeal is 1978-79. The relevant previous year was the Samvat Year 2033.
3. During the previous year under .consideration, the assessee attended the International Congress of Accountants as the leader of the Indian Group of Chartered Accountants. This International Congress was held at Munich (West Germany). The expenses claimed by the assessee in connection with the attending of the said professional conference, were Rs. 13,131, comprising of air-fare from Bombay to Munich and back of Rs. 9,319, Rs. 3,000 conference fees and Rs. 812 being the other expenses directly connected with the conference. The case of the assessee was that the trip to Munich was a part of his professional activity in order to improve his status as a chartered accountant, and thereby ensure a steady and growing inflow of income in future. Hence, the assessee claimed the aforesaid expenses as deduction while computing his professional income on the ground that they were spent wholly and exclusively for the purpose of the profession carried on by him, and that they neither constituted personal nor capital expenditure.
4. The ITO did not say that the aforesaid expenses claimed by the assessee were either personal or capital in nature. Nor did he say that the aforesaid expenses were not wholly and exclusively incurred for the five-day long conference held at Munich. However, he found that the assessee was away from India for 37 days, including two days of travel, while the actual days of conference at Munich were only five. During the other 30 days, the ITO observed, the assessee extensively travelled all over Europe, and took the opportunity of meeting his counterparts in the profession to study the methods of accounting, auditing, tax planning, etc., prevalent in those countries. After so observing, the ITO invoked the provisions of Rule 6D of the Income-tax Rules, 1962, and held that the expenses claimed by the assessee could not be fully allowed, but had to be restricted to five parts out of 37 parts of the total expenses. The reason was that Rule 6D says that the amount to be allowed should be restricted to the amount arrived at by multiplying the total expenditure by a fraction with the number of days spent abroad for the purpose of the assessee's profession as the numerator and the total number of days for which the assessee was out of India as the denominator. It is to be noted at this stage that by applying the fraction of five upon thirty-seven to the total expenses, the ITO impliedly held that the assessee spent only five days abroad for the purpose of his profession even though in his assessment order, the ITO has stated that the remaining 30 days were also spent for the purpose of the assessee's profession, namely, meeting his counterparts and studying matters relating to his profession. However, in the aforesaid view of the matter, the ITO allowed only a sum of Rs. 1,789 as deduction as against Rs. 13,131 claimed by the assessee.
5. The assessee appealed to the A AC, and contended that his claim should have been allowed in full. The AAC observed that Rule 6D stood in the way of allowing the entire claim. However, he held that the assessee should be deemed to have spent 12 days for the purpose of his professional work, and, therefore, he modified the fraction to 12 upon 37, and allowed the sum of Rs. 3,812. Thus, the AAC sustained the disallowance of Rs. 9,319.
6. Shri Anil M. Parikh, the learned asssessee himself, urged before us that his claim should have been allowed in toto. He pointed out that even if he would have gone to Munich only and returned to Bombay soon after the conference was over, yet he would have been obliged to pay the air-fare of Rs. 9,319 as well as the conference fees of Rs. 3,000.
The sum of Rs. 812 was the foreign exchange allotted to him. His point was that the sum of Rs. 13,131 was spent wholly and exclusively for the International Conference of Accountants attended by him. This purpose has been admitted by the revenue authorities to be one incidental to the profession carried on by him. He stated that the entire expenses should have been allowed on this ground alone, because it satisfied all the conditions laid down underSection 37(1) of the Income-tax Act, 1961 ('the Act'). Further, he stated that apart from the five days spent in the conference and the two days spent in travelling, the balance of 30 days were also spent for professional work as has been admitted by the ITO himself in his order. As a matter of argument, he pointed out that had he made another trip to do the work he did during those 30 days, the deduction of another air-fare of Rs. 9,319 could not have been denied to him. His point was that merely because he availed the opportunity of being in Europe on professional work to achieve more professional work that fact should not have been held against him by the revenue. In any case, the entire period of 37 days should have been treated as spent for the purpose of the assessee's profession so that fraction would have become 37 upon 37. Consequently, the entire expenditure should have been allowed.
7. In this connection, he relied on the departmental Circular No. 4, [C. No. 27(3)-IT/50], dated 19-6-1950 [see Taxmann's Direct Taxes Circulars, Vol. 1, 1980 edn., pp. 230-31] which states that "when once it is established that an expenditure of a revenue nature is incurred wholly and exclusively in the interest of the business liable to tax in India, it should be allowed in the assessment without being too meticulous".
8. He then referred to an order dated 3-10-1979 of the Tribunal in IT Appeal No. 148 (Bang.) of 1979 in which the entire expenses incurred by a jockey for attending some race centres in Australia were fully allowed even though, it was described in one of the letters of the sponsoring Bangalore Racing Club that the jockey was going on a holiday. In that case, the Tribunal found as a fact that the assessee was fully engaged in his professional work throughout his absence from India, and so, the Tribunal deleted a part of the expenses disallowed by the revenue authorities. The assessee contended before us that his case is similar, if not better, than the aforesaid case.
9. Smt. V. Gopalkrishnan, the learned representative for the department, on the other hand, supported the order of the AAC. She emphasised the point that all expenses including air-fare and other incidental expenses were subject to the limit laid down under Rule 6D.Hence, she urged that the disallowance made by the AAC, in accordance with the formula laid down in Rule 6D, was quite proper and deserved to be upheld.10. We have considered the contentions of both the parties, as well as the facts on record. We find force in the contentions raised by the learned assessee. The question that is raised in this appeal is whether the expenditure of Rs. 13,131 spent by the assessee is admissible as a deduction while computing his professional income. There is no dispute that the conditions under Section 37(1) have been satisfied in this case. The expenses have been incurred wholly and exclusively for the purpose of the assessee's profession. The expenses were neither capital nor personal in nature. Hence, the expenses evidently are admissible under Section 37(1). If that be so, then any rule prescribed under the rule making power delegated under the Act cannot whittle down the aforesaid position. In the case of Century Enka Ltd. v. ITO  107 ITR 909 the Calcutta High Court held that what is given by the statute cannot be taken away or whittled down by the rules which are framed only to carry out the purpose of the Act. In the case before us, the expenses claimed by the assessee were the minimum that had to be incurred if the assessee was to attend the International Conference.
Hence, they were admissible underSection 37(1). The revenue authorities have disallowed a portion thereof only by acting under Rule 6D. In the case of R.B. Jodha Mal Kuthiala v. CIT  82 ITR 570 the Supreme Court has observed : "It is true that equitable considerations are irrelevant in interpreting tax laws. But those laws, like all other laws, are to be interpreted reasonably and in consonance with justice." (p. 571) On a reading of Rule 6D, it is clear that the intention is to disallow expenses not incidental to the business carried on by the assessee, or those expenses which were not spent wholly and exclusively for the purpose of the assessee's business. It could never be the intention of the rule making authority which framed Rule 6D that the minimum amount of expenditure incurred wholly and exclusively for the business carried on by the assessee is to be disallowed either in whole or in part. Rule 6D has to be read reasonably and in the proper context. In the case of Sassoon J. David & Co. (P.) Ltd. v. CIT  118 ITR 261, the Supreme Court has held that once an expenditure has been incurred wholly and exclusively for the purpose of the assessee's business, it has to be allowed even though a third party is incidentally benefited by it. The Supreme Court pointed out that the expression 'wholly and exclusively' does not mean 'necessarily' also.
In the case before us, even if it is assumed for the sake of argument that the assessee spent the remaining 30 days for non-business purposes, then the expenses wholly and exclusively incurred for his profession amounting to the minimum sum of Rs. 13,131 could not be disallowed because of the authority of Sassoon J. David & Co. (P.) Ltd.'s case (supra). The assessee was not claiming any expenses relating to those 30 days.
11. Be that as it may, we find that 'even on facts, the ITO has himself recorded in his assessment order that the assessee had spent the remaining thirty days in meeting his counterparts in the accountancy profession and studying the methods of accounting, auditing and tax planning prevalent in those countries. Hence, it cannot be said that any portion of the number of days for which the assessee was away from India, was spent for any purpose other than his own profession.
Consequently, no amount could be disallowed from the minimum sum of Rs. 13,131 claimed by the assessee even by invoking Rule 6D.12. The circular dated 19-6-1950 of the CBDT also helps the case of the assessee because this has not been shown before us to have been withdrawn after the introduction of Rule 6D with effect from 1-4-1964.
As has been held in the case of Ellerman Lines Ltd. v. CIT  82 ITR 913 (SC), the directions of the CBDT are binding on the income-tax authorities.
13. We also find support for our conclusion from the aforesaid decision dated 3-10-1979 of the Tribunal, which relates to the assessment year 1975-76 in which year, the Rule 6D was also in force.
14. For the above reasons, we come to the conclusion that there was no justification for disallowing a part of the minimum expenditure evidently incurred by the assessee wholly and exclusively for the purpose of his profession and so we direct that the whole of Rs. 13,131 be deducted while computing the professional income of the assessee.