No deduction u/s 37(1) for expenses incurred by doctor on organizing musical programme, sponsoring garba event and gifts to fellow doctors

Keyur Parikh Vs DCIT (ITAT Ahmedabad)

Conclusion: Expenses incurred by assessee-doctor on organizing musical programme for his professional colleagues, sponsoring garba event organized in the society where he resided and gifts given to fellow doctors on the occasion of marriage or diwali could not be said to be allowable under section 37 for computing his taxable income as all these expenses, could not be said to have been incurred wholly and exclusively for the profession of the assessee so as to qualify for deduction u/s 37(1).

Held: The issue to be adjudicated is whether expenses incurred by the assessee, a doctor by profession, on organizing musical programme for his professional colleagues, sponsoring garba event organized in the society where he resided and gifts given to fellow doctors on the occasion of marriage or diwali could be said to be allowable under section 37 of the Act for computing his taxable income. It was held that as rightly pointed out by AO the Garba event was organized for the benefit of persons limited to those residing in his society. It was a religious programme conducted in the assesses society which he had sponsored as a resident of the society. The sole purpose for incurring the expense was not for the purpose of his profession but also on account of the fact that being a resident of the society he felt obliged to contribute towards the programme. Also by sponsoring the programme, the assessee was allowed to put up hoarding of the hospital where he rendered his services. Therefore, as rightly pointed out by the AO, the immediate beneficiary of the sponsorship was the hospital and not the assessee. Similarly musical program organized for fellow colleagues was nothing but a social event which though helps in promoting the assessee but not only on his professional front but also personal front. This fact cou ldnot be denied. So also the gifts given on marriages and diwali which had been rightly pointed out by the Revenue authorities as being incurred out of social obligations and conventions. All these expenses, could not be said to have been incurred wholly and exclusively for the profession of the assessee so as to qualify for deduction u/s 37(1). Thus, the expenses were not found to have been incurred wholly and exclusively for the profession of the assessee.

FULL TEXT OF THE ORDER OF ITAT AHMEDABAD

Present appeal has been filed by the assessee against order passed by the ld. Commissioner of Income-Tax (Appeals)-4, Ahmedabad [hereinafter referred to as “ld. CIT(A)”] dated 17/5/2017 passed under section 250(6) of the Income Tax Act, 1961 [hereinafter referred to as “the Act” for short] for the Asst. Year 2013-14.

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