T.V.R. Tatachari, C.J.
(1) These six references can be disposed of by a common judgment. They relate to the respective assessment years as stated below :-
I.T. R. No. 197 of 1974 1956-57
I.T. R. No. 172 of 1974 1957-58
I.T. R. No. 104 of 1973 1958-59
I.T. R. No. 105 of 1973 1959-60
I.T. R. No. 106 of 1973 1960-61
I.T. R. No. 107 of 1973 1961-62
(2) The Income-tax Appellate Tribunal, Delhi Bench, has referred to this Court the following question which is common to all the six assessment years :-
'WHETHERon the facts and in the circumstances of the case the expenditure incurred by the assessed in organising Football and Hockey Tournaments was an allowable deduction under Section 10(2) (xv) of the Income-tax Act, 1922 ?'
(3) The assessed Company, M/s. 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 assessed claimed a deduction of the expenses incurred for the conduct of the tournaments in the aforesaid assessment years. The expenses for the assessment years 1956-57 and 1957-58 came to Rs. 53,172.00, while the amounts for the assessment years 1958-59, 1959-60, 1960-61 and 1961-62 came to Rs. 26,103.00, Rs. 21,734.00, Rs. 12,814.00 and Rs. 31.406.00 respectively.
(4) The assessed claimed the deduction of the said expenses under the head of advertisement. According to the assessed, the staging and sponsoring of these tournaments had a great advertising value for the company as day after day the newspapers reported about the D.C.M. Tournaments, thus bringing the name of the D.C.M. Group into prominence. The assessed claimed that the said expenses were incurred wholly and exclusively for the purpose of business, and deducation of the same was, thereforee, allowable under Section 10(2) (xv) of the Income-tax Act, 1922.
(5) The Income-tax Officer refused to allow the deduction taking the view that the holding of the tournaments could hardly be said to have any connection with the business of the assessed, that there was no direct connection between the business and the conduct of the tournaments, and even if there might be some remote connection between the two, the same wa.s not enough for claiming the deduction of the expenditure, as such deduction could be claimed only if the expenditure was incurred wholly and exclusively in the carrying on of the business, and that the readers of the reports in the newspapers would not be connecting in their minds the name of the tournament with the name of the company.
(6) On appeals by the assessed, the Appellate Assistant Commissioner allowed the claim for deduction to the extention of Rs. 20,000.00 only, following his orders for the prior years.
(7) On further appeal by the assessed, the Appellate Tribunal held that by holding the tournaments the assessed gets publicity, that the headlines to the reports in the newspapers about the tournaments go a long way to make the company a house-hold 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 times, 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 assessment years in full.
(8) Then, at the instance of the Commissioner of Income-tax, Delhi, the Tribunal referred to this court the question which we have already set out earlier in this judgment.
(9) As stated earlier, the assessed claims deduction of the expenditure under Section 10(2) (xv) of the Income-tax Act, 1922, which reads as under :
'(XV)any expenditure (not being an allowance of the nature described in any of the clauses (i) to (xiv) inclusive, and not being in the nature of capital expenditure or personal expenses of the assessed) laid out or expended wholly and exclusively for the purpose of such business, profession or vocation.'
Thus, the above provision, the expenditure would be allowable as deduction if it was incurred wholly or exclusively for the purpose of the business, profession or vocation of the assessed. It should not be an allowance of the nature described in any of the clauses (i) to (xiv) of Section 10(2). It should also not be in the nature of capital expenditure or personal expenses of the assessed. It has been held in a number of cases that expenditure laid out wholly or exclusively for the purpose of business, profession or vocation would include the costs of advertisement (vide Ward & Co. Ltd. vs. Commissioner of Taxes, 1923 A. C. 145; Central India Spg' Wvg. & . vs. Commissioner of Taxes, Ii 266 Itr 286 : Cillatt & Watts v. Colquhoun 2 To 76, 81(3) ; Re- Hindustan Commercial Bank Ltd. vs. : 21ITR353(All) ; and Southern vs. Aldwych Property Trust Ltd., 23 T. C. 707.
(10) 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 & Sons' Collieries Ltd. vs. Ir 8 Tc 671, Commissioner of Income Tax . vs. Chandulal Keshavlal & Co., : 38ITR601(SC) Further, as held in Eastern Investment Ltd. vs. Commissioner of Income Tax . : 20ITR1(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 or money expended not of necessary and with a view to direct and immediate benefit to the made for the purpose of the 'rade. Also 'a sum or money expended and in order indirectly to facilitate the carrying on of the business may yet be expended wholly and exclusively for the purposes of the trade' (vide observation of Viscount Cave Lc in Atherten v. British Insulaton & Helsby Cables Ltd., 10 T.C. 155 which was quoted with approval and applied by the Supreme Court of India in Eastern Investments Ltd. vs. Commissioner of Income Tax . at page 5 (supra) ; and in Commissioner of Income-tax vs. Chandulal Keshavlal & Co. at pages 601, 611 (supra).
(11) It is in the light of the above principles that the question in the present case is to be considered. As submitted by the assessed and accepted by the Appellate Tribunal, it cannot be disputed that the staging and sponsoring of the tournaments and the reports in the newspapers day after day about the D. C. M. Tournaments would certainly bring the name of the D. C. M. Group into prominence with the consequent advertising value for the company. The view of the Income-tax Officer, which was rightly rejected by the Appellate Assistant Commissioner and the Appellate Tribunal, that the holding of the tournaments does not have any connection with the business of the assessed, and that the readers of the reports in the newspapers would not be connecting m their minds the name of the tournament with the name of the company is not sound. Continuous and persistent reference to the letters 'D.C.M.' meaning Delhi Cloth Mills would naturally make it almost a household expression, and the same would get impressed in the minds of the readers of the reports in the newspapers advertisement media. Further, as submitted on behalf of the assessed and accepted by the Appellate Tribunal, the holding of the tournaments by the D. C. M. Group provides opportunities to the employees of the Mills to participate and also to witness such tournaments,and thus operates as an amenity provided for the recreation of the employees. The furnishing of such amenities would go a long way to help the business of the assessed. We, thereforee, agree with the view taken by the Appellate Tribunal and hold that the expenditure incurred by the assessed in organising Football and Hockey Tournaments, was an allowable deduction under Section 10(2) (xv) of the Income-tax Act, 1922. We accordingly answer the question referred in the affirmative.
INthe circumstances of the ease, the parties are directed to bean their own costs.