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TMI Blog2015 (10) TMI 2381X X X X Extracts X X X X X X X X Extracts X X X X ..... ent year 198687, the applicant incurred an expenditure of Rs. 43,600/on a foreign tour in connection with a pre-operation investigation of his eyes while determining his total income. This claim was disallowed by the Assessing Officer in the assessment order dated 31st March, 1987 passed under section 143 (3) of the Act on the ground it was personal expenditure. Therefore, it did not arise in the course of the profession nor was it incidental to the profession. 3. The applicant being aggrieved by the Assessment Order dated 31st March, 1987 preferred an appeal before the Commissioner of Income Tax (Appeals) (CIT(A)). By order dated 12th October, 1988 the CIT(A) upheld the order of the Assessing Officer disallowing the said expenditure on the ground that if the logic of the applicant is stretched, 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 business or profession. 4. The applicant being aggrieved by the order dated 12th October, 1988 passed by the CIT (A) approached the Tribunal. By an order dated 13th September 1994 the Tribunal concurred with the findings of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . If the medical treatment was not to be undertaken, then the assessee would not have been in a position to practice his profession. It is submitted that Section 37 of the Act is required to be interpreted so as to permit allowing of such medical expenditure as claimed by the assessee. In support of these submissions, Mr.Joshi has relied upon the decisions in the case of (1) "Sakal Papers Pvt.Ltd vs. Commissioner of Income Tax Poona 114 ITR 256, (2) Mehboob Productions Private Ltd vs. Commissioner of Income Tax Bombay CityI (106 ITR 758), (3) Commissioner of Income Tax vs Steel Ingots Pvt. Ltd. (220 ITR 552) and (4) Commissioner of Income Tax, Delhi vs Delhi Safe Deposit Co.Ltd, (133 ITR 756). 7. Mr.Joshi learned counsel for the applicant next submits that the expression 'wholly and exclusively' as used in Section 37 (1) of the Act does not mean necessarily and that it is for the assessee to decide whether the expenditure should be incurred in the course of business or profession. In support of this submission, Mr. Joshi places reliance on the decisions of the Supreme Court in the case of Sasoon J.David & Co. Pvt. Ltd vs. Commissioner of Income Tax (Bombay) (118 ITR 281) E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st not be of the nature described in Sections 30 to 60; (2) The expenditure must have been laid down wholly and exclusively for the purpose of business / profession of the assessee; (3) The expenditure must not be capital in nature; (4) The expenditure must not be personal in nature 11. Keeping the above broad legal requirement, we shall now examine the rival submissions and the case laws relied upon by the respective parties. The primary submission of the Appellant is that the expenditure incurred on investigation and treatment of his eyes be allowed as a deduction under Section 37(1) of the Act. This on the ground that it is not a personal expenses but incurred wholly and exclusively for the purpose of his profession. It is submitted that in the absence of the investigation and treatment of the eyes, it would be impossible to carry on the profession of an Solicitor. Thus, the expense was for the purposes of the profession and must be allowed. The Tribunal did not accept the above submissions by inter alia holding that eyes are necessary for effective living as an human being. An identical issue arose before the Delhi High Court in Shanti Bhushan (supra). The only difference b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roduction (P) Ltd. (supra), Sakal Papers (P) Ltd. (supra) and of M. P. High Court in Steel Ingots (P) Ltd. (supra). All the above decisions were rendered not in the context of expenses being personal in nature. In all the three cases, the assessee which was a body corporate had not incurred any personal expenses but had claimed deduction of expenses being amounts paid by it to others i.e. employees or relatives of the employees. It was in the above context that the Court held it was be allowed on commercial expediency. Thus, the question of considering the words 'not being in the nature of personal expenses of the assessee' was not the issue for consideration. Therefore, none of the above three decisions have any application to the present facts. 14. Similarly the reliance upon the decision of the Apex Court in Delhi Safe Deposit Co. Ltd. (supra) is inappropriate. In this case also the Court was not concerned when the words "Not being in the nature of personal expenses." It was concerned with an issue of expenditure being incurred for purposes of keeping the trade going. In this case as pointed out herein above this expenditure is for personal well being and the benefit if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exclusively for the purposes of business or profession". In normal understanding the word "wholly" would mean entirely and the word "exclusively" would mean solely. Thus, any element of expenditure not laid out entirely and solely for the purpose of profession would not be covered by Section 37(1) of the Act. One has to examine this from the perspective/ prism of the person who does makes the expenditure. In this case, the benefit, if any, of improvement in the eyes may/ would also enure to the applicant not only in the profession but also in all other walks of life. However, the test would really be whether in the absence of being in business or profession, would the applicant have incurred the expenditure to improve his eyes and the answer has to be 'yes' keeping in view the normal conduct of human affairs. This is because effective eye sight is a necessity for living a life of a complete human. Therefore, in this case the expenditure is personal and incidental benefit if any is to the profession carried out by the applicant. The Supreme Court in the case of "CIT, Delhi vs. Delhi Safe Deposit Co.Ltd., (AIR 1982 SC 757)" considering as to what would be the true test of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clear that the requirement to claim a deduction under Section 37 which is a residuary provision is quite clear, which is that the expenditure must not be of the nature described in section 30 to 36; secondly the expenditure must not be capital in nature; thirdly the expenditure must have been laid down wholly and exclusively for the purpose of business/profession of the assessee; and fourthly the expenditure must not be personal in nature. Applying these requirements of the statutory provision and the settled position in law as noted by us in the above decisions, we have no hesitation to reach a conclusion that the applicant is not entitled to claim deduction in respect of the expenditure incurred by him on foreign tour undertaken by him in the assessment year in question for the purpose of preoperative treatment of his eyes. It cannot be disputed that the expenditure of Rs. 43,600/on foreign tour claimed to be undertaken by the appellant is for the purpose of pre-operation investigation of his eyes. We are not persuaded to accept the submission on behalf of the applicant that eyes are required to be exclusively used for the purpose of profession by the applicant. As observed above ..... X X X X Extracts X X X X X X X X Extracts X X X X
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