Case Law Details
Shanti Bhushan Vs. CIT (Delhi High Court) -Delhi High Court has disallowed the income tax deduction for expenses incurred on heart surgery by eminent lawyer Mr. Shanti Bhushan. It was argued by Mr. Bhushan that he suffered a heart attack due to professional work and the expenditure incurred by him on a heart operation must be deductible under Section 31 of the Income Tax (I-T) Act.
Bhushan’s claim is based on the grounds that the heart is a “plant” and the expenditure has been incurred on “current repairs”. He also claimed that his professional receipts rose substantially after the operation and the expenditure was “wholly & exclusively” for his profession and deductible under Section 37(1) of the I-T Act.
Dismissing his plea, the high court noted that “if the heart were to be considered a‘plant’, it would necessarily mean that it is an asset which should have found a mention in the assessee’s balance sheet. This was not done and cannot be done as the ‘cost of acquisition’ of such an asset cannot be determined, and, even if the widest meaning to the word ‘plant’ is given, the heart does not satisfy the ‘functionality’ test, because while the heart is necessary for survival, it does not mean it is used as a ‘tool’ for trade or professional activity.” THE high court further said that the claim under Section 37(1) was not acceptable as the expenditure was not incurred wholly and exclusively for the assessee’s profession. There was no direct or immediate nexus between the expenses incurred by the assessee and his efficiency in the professional field per se, it said. Although Bhushan is of the view that the high court’s review and judgment are comprehensive, he says the court has committed an error. “It is a comprehensive but controversial judgment. If the court says that the heart should have been mentioned in previous years’ accounts as an asset, I say that it is not a ‘purchased asset’ but a ‘God-given gift.’ If the asset is given free, the cost of repairs should be allowed to be deducted,” said Bhushan. If the apex court rules in Bhushan’s favor, it will become law and hence all expenses on such heart surgeries by professionals will be tax-deductible.
THE HIGH COURT OF DELHI AT NEW DELHI
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i s n mahajan under gone heart sergery in the month of march 2012 asian heart institute mumbai & to bear expenses i have to surrender my leave & medical benifit which treated as income and sum of rs 78000/- deducted from salary under the head income tax .i hear by pray for getting exemption under any section of income tax because the money not used for any entertenment or any investment but to used to survive the life .so this case may be consider for getting exemption from income tax.
Hi,
This is realy interesting case to read and discuss.
I am a Financial Accountant and my boss Mr.Karumbaiha, told a sample of this story in the time of our Monthly meeting while discussing on Income Tax.
These expenses are deductible u/s 80D depending upon the age of the taxpayer but certainly not under section 37 otherwise every taxpayer will claim their grocery expenses and clothing expenses as deductible expenses on the ground that human body is a factory and all expenses incurred on its maintenance be allowed as repairs and maintenance.However Court is wrong in arguing that if it is a plant it should be shown as asset.Plant is a wide term and include even books which are written off without being capitalized.Therefore it is not necessary that plant has to appear in the Balance Sheet in all cases.