Tribunal held that the sum was paid to the employees when the assessee hired a person referred by those existing employees. The Assessing Officer had failed to bring any material on record to justify the disallowance. According to the Panel the expenditure was allowable under section 37(1). There was no infirmity in the order of the Panel because such expenditure was incurred by the assessee for the purpose of recruitment of its own employees. The payment for such referral was made to the employees of the company who were existing and who referred new employees. Therefore, the expenditure was incurred wholly and exclusively for the purposes of the business. (AY.2011-12)