| 17/5/2012 |
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| Board of Special Commissioners - Cases |
| Case No. 2/62 |
Decided: 16 January, 1963 |
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Deduction in respect of business travel - article 10, now 14, Income Tax Act
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The Board agreed that in certain lines of business a businessman has to travel overseas periodically with a view to promoting his business by obtaining first hand information of the merchandise he would be purchasing. Moreover it is important that he maintains personal contact with his suppliers, make new contacts and avail himself of bargains of which he would not have been aware had he not been on the spot at that particular time.
Such travel, however, must be limited to what is absolutely necessary and the relative expenses have to be definitely incurred "wholly and exclusively in the production of the income." Expenses incurred in making new contacts, for instance, are not allowed: they are incurred for the enduring benefit of the trade and are, therefore, capital in nature. The higher the deduction in respect of travelling expenses that is claimed and the longer the travel period, the more accountability is expected of the taxpayer. He is required to supply to the Revenue detailed documentary proof of reasonable expenses incurred.
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