This is appeal filed by assessee against order of CIT(A) dt. 19th Sept., 2003 for asst. yr. 2000-01, in matter of order passed under s. 143(3) of IT Act, 1961, wherein following grounds of appeal have been raised: "1. That on facts and circumstances of case and in law, order passed by CIT(A) confirming additions made by AO is bad in law and deserves to be quashed. That on facts and circumstances of case and in law, CIT(A) erred in agreeing with AO that fee paid for US GAAP of Rs. 2,53,825 does not relate to business carried on by appellant. That on facts and in circumstances of case and in law, CIT(A) has erred in holding that fees of Rs. 2,53,825 paid to auditors for U S GAAP work has not been incurred wholly and exclusively for business operations in India." Rival contentions have been heard and record perused. Brief facts of case are that assessee is banking company and is branch of Chinatrust Commercial Bank, doing business in India as per RBI approval. During course of assessment under s. 143(3) of Act, AO disallowed assessee s claim for payment of audit fee of Rs. 2,53,825, paid to M/s Lovelock & Lewes for US GAAP audit of branch Rs. 2,53,825. AO disallowed this expenditure stating that same is not attributable to branch in India. By impugned order, CIT(A) confirmed action of AO by observing that expenditure was not incurred wholly and exclusively for business operation of Indian Branch, as there was no requirement as per Indian Law to get audit as per US GAAP. We have considered rival contentions, carefully gone through orders of authorities below and found from record that assessee as branches of foreign company/banking companies have to do regularly report to their head office about their operations in India, which may be regular reporting, or year-end annual reporting. monthly reporting also unlimitedly culminates into yearly reporting. annual branch accounts are nothing but part of annual reporting to head office. reporting from all its branches prepared under one accepted accounting principles would facilitate comparisons and authenticate accounts. assessee Chinatrust Commercial Bank, Indian Branch, for purposes of management information system reporting (MIS) report their financial results compliant with US GAAP to there head office. As per our considered view, expression "for purpose of business" includes expenditure voluntarily incurred for commercial expediency, and it is immaterial if third party also benefits thereby. expression "commercial expediency" is expression of wide import and includes such expenditure as prudent businessman incurs for purpose of business. expenditure may not have been incurred under any legal obligation, but yet it is allowable as business expenditure if it was incurred on grounds of commercial expediency. Commercial expediency also includes voluntary expenditure not having direct and immediate nexus with benefits. Hon ble Madhya Pradesh High Court in case of Hindustan Electro Graphites Ltd. vs. CIT (1996) 135 CTR (MP) 157: (1996) 218 ITR 688 (MP), held that expenditure incurred on plantation in factory premises and residential quarter of assessee company was liable to be allowed as revenue expenditure, as same was incurred for purpose of business. Under provisions of ss. 36 and 37 of Act while allowing claim of deduction of expenditure, it is enough to show that money is expanded not of necessity and with view to provide immediate benefit but voluntarily on ground of commercial expediency and in order to directly or indirectly facility to carry on of business. Hon ble Supreme Court in case of CIT vs. Walchand & Co. (P) Ltd. (1967) 65 ITR 381 (SC), and in case of J.K. Woollens Manufacturers vs. CIT (1969) 72 ITR 612 (SC) had categorically observed that while deciding as to whether expenditure was wholly and exclusively laid out for purpose of business and its reasonableness is to be judged from point of view of businessman and not of Revenue. Applying these principles to facts of case, we found that assessee Chinatrust Commercial Bank with operations in India requires their India operations to report financial statements compliant with US GAAP to head office for report financial statements compliant with US GAAP to head office for purpose of preparing consolidated financial statements of group. obligation to prepare accounts of its region under US GAAP flows down till branches level and accordingly branches were required to prepare and align accounts as per US GAAP. In present case, branch had prepared and aligned its accounts at its end with that of head office. For this purpose, branch had engaged M/s Lovelock & Lewes for alignment of Branch accounts. These branch accounts prepared under US GAAP were subsequently consolidated overseas at end of head office for which no amounts were paid to M/s Lovelock & Lewes by branch and same were borne by head office only. We also found that genuineness of expenditure incurred on audit fee was not doubted. In view of above discussion, we are inclined to agree with learned Authorised Representative, Shri Samir Gogia that disallowance of expenses o f Rs. 2,53,825 on account of Audit Fee paid to M/s Lovelock & Lewes for conducting US GAAP Audit was not valid and needs to be quashed. In result, appeal of assessee is allowed. *** CHINATRUST COMMERCIAL BANK v. ADDITIONAL DIRECTOR OF INCOME TAX