V.D. Misra, J.
(1) M/S Bhanna Mal & Company Private Ltd., Delhi, the assessed, during the assessment year 1956-57 (for which the accounting year ended on October 25, 1955), spent a sum of Rs. 130.00 in its Patna branch and Rs. 65.00 in its Alwar branch over the salary of a pujari. who used to invoke the blessings of Gods and Goddesses of prosperity for the benefit of assessec. The Incometax Officer disallowed both these items as not being a deductable expense without assigning any reason. The assessed appealed. The Appellate Assistant Commissioner confirmed the dis-allowance observing that the assessed had failed to prove as to how these expenses were necessary for the purpose of running the business.
(2) On Second appeal, the income-tax Appellate Tribunal held that although such expenses might not be tangibly connected with the carrying on of the business, it had certainly an intangible bearing on it since to a God fearing man such expenses were expense which create a sense of security and prosperity and add to assessece's general capability to do better busines. Accordingly, the assessed's claim to deduct the said items as an admissible expenses was allowed On an application made by the Revenue, the following question has been referred under Section 66(1) of the Income-tax Act. 1922 :
'WHETHER on the facts and in the circumstances of the case, the expenditure of Rs. 130.00 and Rs. 65- totalling to Rs. .195.-. incurred by the assessed on account of the salary paid to a pujari (priest) was an admissible deduction ?'
(3) It is contended on behalf of the Revenue that Section 10(2) (XV) of the income-tax Act. 1922, under which these expenses arc claimed, does not allow them. This section reads as under: 'Sec 10.
(1) The tax shall be payable by an assessed under the head (Profits and gains of business profession or vocation) in respect of the profits or gains of any (business, profession or vocation carried on by him. (2) Such profits or gains shall be computed after making the following allowances, namely :-- (xv) any expenditure, (not being an allowance of the nature described in any of the clauses (i) to (xiv) inclusives 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) :
Can these expenses be said to be wholly or exclusively for the purpose of the business of the assessed The import of the expression for the purpose of the business' was considered by the Supreme Court in Commissioner of Income-fax, Kerala v. Molayalam Plantation Ltd.. : 53ITR140(SC) where it was observed at under : 'THE expression 'for the purpose of the business' is wider in scope than the expression 'for the purpose of earning profits'. Its range is wide: it may take in not only the day to day running of a business but also the rationalisation of its administration and modernisation of its machinery; it may include measures for the preservation of the business and for the protection of its assets and property from expropriation, coercive process or assertion of hostile title: it may also comprehend payment of statutory dues and taxes imposed as a pre-condition to commence or for the carrying on of a business; it may comprehend many other acts incidental to the carrying on of the business. How ever wide the meaning of the expression may be, its limits are implicit in it. The purpose shall be for the purpose of the business, that is to say, the expenditure incurred shall be for the carrying on of the business and the assessed shall incur it in his capacity as a person carrying on the business.'
(4) The Calcutta High Court in Indian Steel & Wire Products Ltd. v. Commissioner of Income-tax, West Bengal : 69ITR379(Cal) disallowed the contribution made by the assessed to the Indian National Congress for seeking the patronage of the political party in power for the preservation and furtherance of their business on the ground that it was not an expenditure solely or exclusively for earning the profits within the meaning of Section 10(2) (XV) of the Act. It was also observed that assuming that there was some connection between this kind of expenditure and the earning of profits, the con- nection was too remote.
(5) Mr. B. N. Kirpal, appearing for the assessed, contends that it is for the businessman to decide whether a particular expenditure is in the interests of his business and the revenue has no right to sit on his judgment He relies upon the Supreme Court judgment in Commissioner of Income-tax, Bombay V. Walchand & Co. Private Ltd. : 65ITR381(SC) where it was held that in applying. the test of commercial expediency for determining whether an expenditure was wholly and exclusively laid out for the purpose of the business, reasonableness of the expenditure has to be adjudged from the point of view of the businessman and not of the revenue.' It was also held that it is open to the Tribunal to come to a conclusion either that the alleged payment is not real or that it is not incurred by the assessed in the character of a trader or that it is not laid out wholly and exclusively, for the purpose of the business of the assessed and to disallow it. But it is not the function of the Tribunal to determine the remuneration which in their view should be paid to an employee of the assessed'. He also refers to Sree Meenakshi Mills Ltd. V, Commissioner of Income-tax Madras : 63ITR207(SC) wherein their Lordship of the Supreme Court, while holding that the expenditure incurred to resist in a civil proceeding the enforcement of a measure, legislative or executive, which imposes restrictions on the carrying on of a business, or to obtain a declaration that the measure is invalid, would, if other conditions are satisfied, be admissible as a deduction under Section 10(2) (XV) observed :
'THE deductibility of expenditure incurred in prosecuting a civil proceeding depends upon the nature and purpose of the legal proceeding in relation to the assessce's business and cannot be affected by the final outcome of that proceeding. However wrong headed, ill advised, unduly optimistic or over-confident in his conviction the assessed might appear in the light of the ultimate decision expenditure in starting and prosecuting a civil proceeding cannot be denied as a permissible deduction in computing the taxable income merely because the proceeding had failed, if otherwise the expenditure was laid out for the purpose of the business wholly and exclusively, that is, reasonably and honestly incurred to promote the interest of the business. Persistence of the assessed in launching the proceeding and carrying it from court to court and incurring expenditure for that purpose is not a ground for disallowing the claim.'
(6) According to the test laid down in Malayalam Plantations Ltd.'s(1) case (supra) it is necessary that the expenditure incurred should be turn the carrying on of the business and the assessed should incur it in his capacity as a person carrying on the business. The expenses incurred for the salary of Pujari for invoking the blessings of God and Goddesses for prosperity has no relationship to the carrying on of the business by the assessed. According to Mr. Kirpal because of the belief which the assessed had in respect of the super-natural blessings, it should be held that these expenses were incurred for running the business. It is neither possible nor desirable to delve in the sphere of super-naturalism. For some it is superstition only while for the others,, it is an essential part of life since the destinies of men are controlled by these forces. May be there are forces in heaven of which the men know not. Be that as it may, it is difficult to hold that the expenses in question were incurred for the carrying on the business of the assessed and that he incurred the same as a business man. Walchand's (3) case (supra) does not help the assessed. What has been held in that case is that once an expenditure falls within the category of an allowable expense the expenditure and its extent has to be Judged from the point of view of the business man and not the revenue. But in the instant case we are called upon to decide whether the expenditure in question is an allowable expense or not. Sree Meenakshi Mills Case (supra) related to expenses of civil litigation which had a direct connection with the running of the business of the assessed and so the assessed cannot derive any benefit from it.
(7) The result is that we hold that the expenses in question are not an admissible deduction. The question is answered in the negative in favor of the Revenue and against the assessed. In the circumstances of the case the parties are left to bear their own costs.