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MEDICAL TREATMENT OF EYES FOR IMPROVING THE VISION HAS AN ELEMENT OF PERSONAL EXPENDITURE

Income Tax - Direct Tax Code - DTC - By: - Mr. M. GOVINDARAJAN - Dated:- 13-11-2015 - Section 37 of the Income Tax Act, 1961 ( Act for short) provides that any expenditure (not being expenditure of the nature described in Sections 30 to 36 and not being in the nature of capital expenditure of personal expenses of the assessee) laid out or expended wholly and exclusively for the purposes of the business or profession shall be allowed in computing the income chargeable under the head Profit and ga .....

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living of a human being. This condition is irrespective of the people who are engaged in the business, profession or vocation carried on by him. If the expenditure is attributable to both personal and professional it cannot be allowed as a deduction to the professionals. Such type of expenditure has an element other than business or profession. In Dhimant Hiralal Thakar V. The Commissioner of Income Tax - B.C. II - 2015 (10) TMI 2381 - Bombay High Court the applicant is a solicitor. He has incu .....

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als), on the file of appeal by the applicant, upheld the order of the Assessing Officer disallowing the said expenditure on the ground that if the logic of the applicant is allowed, it would mean that even expenditure incurred on food to preserve oneself should also be treated as allowable under Section 37(1) of the Act as being incurred for the business. The Tribunal also concurred with the findings of the Assessing Officer. The Tribunal held that the expenditure incurred by the applicant canno .....

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tment is relating to the assessee s profession; The eyes have a direct nexus with the professional activity of the application and therefore it is not a personal expenditure as held by the authorities below; Medical treatment for eyes is so very important from the point of view of the profession of the assessee and has a direct relation to the profession; If the medical treatment was not undertaken then the applicant would not have been in a position to practice his profession; Section 37 of the .....

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nction as a Solicitor in the absence of eyes; The moment this test is applied and it becomes apparent that there is a element of personal use of the yes then the assessee cannot claim expenditure for treatment of eyes under Section 37 of the Act; Expenditure as claimed by the applicant goes completely beyond the ambit and scope of Section 37 of the Act; This expenditure as claimed by the applicant has rightly held as a personal expenditure. The High Court analyzed the provisions of Section 37 an .....

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the Delhi High Court in Shanti Bhushan case in which an identical issue arose before the High Court. The only difference being the expenses claimed therein was for the treatment of the heart and here it is for eyes. The Delhi High Court in Shanti Bhushan case observed that an impaired heart would handicap functionality of a human being irrespective of his position, status or vacation in life. Expenses incurred to repair an impaired heart would thus add perhaps to the longevity and efficiency of .....

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