1991 (12) TMI 91 - AT - Income Tax

Summary

Issues Involved:
1. Deduction of medical expenses under Section 37(1) of the Income-tax Act, 1961.
2. Determination of whether the medical expenses are personal or professional in nature.

Issue-Wise Detailed Analysis:

1. Deduction of Medical Expenses under Section 37(1) of the Income-tax Act, 1961:
The assessee, a professional actor specializing in villain roles, claimed a deduction of Rs. 1,29,190 for expenses incurred for an open heart surgery in the USA. The claim was made under the provisions of Section 37(1) of the Income-tax Act, 1961, asserting that the expenditure was incurred "wholly and exclusively for the purpose of the profession." The assessee argued that the surgery was necessary to maintain his physical fitness, which is essential for his profession. He cited the case of Prince v. Mapp (Inspector of Taxes) [1971] 79 ITR 671 (Ch. D.) to support his claim. However, the Income Tax Officer (ITO) and the Commissioner of Income Tax (CIT) (Appeals) disallowed the claim, stating that the expenditure was personal and not incurred solely for professional purposes.

2. Determination of Whether the Medical Expenses are Personal or Professional in Nature:
The ITO and CIT (Appeals) concluded that the medical expenses were personal, emphasizing that the surgery was essential for the assessee to live as a healthy man, and only incidentally related to his profession. They relied on the case of Norman v. Golder (Inspector of Taxes) [1945] 13 ITR (Suppl.) 21 (CA), which held that personal health expenses cannot be considered wholly and exclusively for professional purposes. The Tribunal upheld this view, stating that the expenditure was driven by a personal desire to live longer and could not be split into professional and personal segments. The Tribunal also noted that the decision in the case of Mehboob Productions (P.) Ltd. v. CIT [1977] 106 ITR 758 was not applicable, as the facts were distinguishable. In Mehboob Productions, the expenditure was incurred by a company for its director, which was deemed wholly and exclusively for business purposes. However, in this case, the expenditure was incurred by the individual assessee for personal health reasons.

Conclusion:
The Tribunal dismissed the appeal, upholding the decision of the IT authorities to disallow the deduction of Rs. 1,29,190. The Tribunal emphasized that the expenditure was personal in nature and not incurred wholly and exclusively for professional purposes, as required under Section 37(1) of the Income-tax Act, 1961.