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TMI Blog2017 (3) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... ief facts of the case qua the assessee are that the assessee filed return of income on 24.09.2009 declaring total income of Rs. 11,39,230/-. The assessee`s case was selected for scrutiny U/s 143(3) of the Act and Assessing Officer completed the assessment by making addition of medical insurance receipt of Rs. 2,41,767/-. The assessee had received a sum of Rs. 2,41,767/-as reimbursement of expenses incurred in relation to a surgery of gall bladder by New India Insurance Company under medical insurance policy. Assessing officer observed that the amount of insurance receipt of Rs. 2,41, 767/- on account of medical, is an income U/s 2(24) of the Income Tax Act and since no express exemption is granted under any provisions of the Act therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... way, but reimbursement of expenses cannot be income because the assessee is getting the money back, which he already spent. Assessee did not earn this money at all which he is getting as reimbursement. Reimbursement does not mean that the assessee is deriving any income from any sale of goods and services. There is no motive to earn income out of medical insurance. 4.2 On the other hand, the Ld DR for the Revenue has primarily relied on the stand taken by the Assessing Officer, which we have already noted in our earlier para, and the same is not being repeated for the sake of brevity. 4.3 Having Heard the rival submissions, perused the material available on record, we are of the view that there is merit in the submissions of the assessee, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... derstood. So long as the amount taxed as income can rationally be called income as generally understood, it is competent for the Parliament to call it income and levy tax thereon. (Section 44AC and 206C)" After going through the definition of the income, as explained above, one can say easily that the "reimbursement" is not an income. The term "reimbursement" does not fall in the characteristics of income. No doubt the definition of 'income' is inclusive. This, of course, does not mean that an amount which can, by no stretch of imagination, be called income can be treated as income and taxed as such by parliament. It must have some characteristics of income as broadly understood. Based on the above analysis of the term 'income', we are o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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