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Issues Involved:
1. Whether the expenditure incurred on coronary by-pass surgery is allowable under Section 31 of the Income-tax Act, 1961. 2. Whether the expenditure incurred on coronary by-pass surgery is allowable under Section 37(1) of the Income-tax Act, 1961. Issue-wise Detailed Analysis: 1. Allowability of Expenditure under Section 31: - Assessee's Argument: The heart should be considered a "plant" within the meaning of Section 31, and therefore, the expenditure incurred on its repair (coronary by-pass surgery) should be deductible. The assessee cited the inclusive definition of "plant" in Section 43(3) and various case laws to support a broad interpretation of "plant." - Revenue's Argument: The heart or human body of a professional cannot be regarded as a plant. The definition of "plant" in Section 43(3) implies machinery and equipment, and a human heart does not fit this definition. The expenditure is personal and not related to the business or profession. - Tribunal's Analysis: The Tribunal applied the functional test laid down by the Supreme Court, which asks whether the article fulfills the function of a plant in the assessee's trading activity. The Tribunal concluded that the heart is an essential organ for life, not a tool or plant used specifically for professional activities. The heart's function is involuntary and not within the individual's control, unlike other organs like fingers or vocal cords, which can be used at will for professional purposes. Therefore, the heart cannot be considered a "plant" within the meaning of Section 31 read with Section 43(3). - Conclusion: The expenditure incurred on coronary by-pass surgery is not allowable under Section 31. 2. Allowability of Expenditure under Section 37(1): - Assessee's Argument: The primary purpose of the by-pass surgery was to enable the assessee to carry on his professional activities effectively and efficiently, not merely to live longer. Hence, the expenditure was incurred wholly and exclusively for the purpose of his profession. - Revenue's Argument: The dominant purpose of the expenditure was to prolong life, not to earn or augment professional income. The expenditure was personal in nature and not incurred wholly and exclusively for the purpose of business or profession. - Tribunal's Analysis: The Tribunal observed that the primary motive for the surgery was to live longer with a healthy heart and avoid the risk of another heart attack. The desire to live longer was paramount, and any professional benefit was incidental. The expenditure was personal and not incurred wholly and exclusively for professional purposes. The Tribunal referred to the case of Norman, where medical expenses incurred due to unhealthy working conditions were deemed personal and not deductible. - Conclusion: The expenditure incurred on coronary by-pass surgery is not allowable under Section 37(1). Final Judgment: The appeal is dismissed as the expenditure incurred on coronary by-pass surgery is neither allowable under Section 31 nor under Section 37(1) of the Income-tax Act, 1961.
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