Foreign trip Expenses on spouse of Director not allowable unless connected with business

Foreign travelling expenses incurred by the company on travel of directors and their family members is general in present business scenario and globalization of marketing policies. Through travelling the businessman learn market development policies applied in different areas considering the environment and its effect on consumer product. So while deciding the allowability of these type of expenditure the Department should have consider all aspect as true businessman. Further the principle laid down in the case of Bombay Mineral Supply Co. (P.) Ltd is good law to understand both side:

“We are sure that tax collectors do not want to discourage business executives and managing directors from undertaking foreign tours for business purposes nor to deprive them of the company of their wives in such tours, but for that we do not think that, in law, it would be permissible for the Income-tax Officer to allow the expenses incurred for rendering such company, however necessary and enjoyable it may be from the point of view of the personal needs of those executives.”