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TMI Blog2018 (3) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... rcial expediency” and thus the same is correctly claimed as expenditure u/s 37(1) and be allowed fully. No merit for disallowance of the medical expenditure incurred on reimbursement to the Director. - Decided in favour of assessee. - ITA No.4955/Mum/2017 - - - Dated:- 22-1-2018 - SHRI R. C. SHARMA, AM For The Assessee : Shri K. Gopal For The Revenue : Ms. N. Hemalatha ORDER PER R.C.SHARMA (A.M): This is an appeal filed by the assessee against the order of CIT(A)- 4, dated 01/03/2017 for A.Y.2011-12 in the matter of order passed u/s.143(3) of the IT Act. 2. Following grounds have been taken by the assessee:- 1. Confirming addition to total income of ₹ 18,83,892/- being entire expenses on medi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e company since incorporation. Mr Ananad Sagar suffered a paralytic stroke (neurological disease) and was operated for DBS at Kokilaben Dhiruben Ambani Hospital. Accordingly the expenditure for the same is correctly claimed as medical expenses for directors under the head staff welfare. Also refer rule 3A. 5. However, AO did not impress with the assessee s reply and held that the medical expenses of Rs, 18,44,021/- incurred by the company on Mr. Anand Sagar, Director of the company for the purpose of paralytic attack is not allowable in view of the legal position contended in section 37 (i) of the Income tax Act, 1961. 6. By the impugned order, CIT(A) confirmed the action of the AO against which assessee is in further appeal before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Anand Sagar suffered a paralytic stroke (neurological disease) and was operated for DBS at Kokilaben Dhirubhai Ambani Hospital. Accordingly the expenditure for the same is correctly claimed as medical expenses for directors under the head staff welfare. Assessee had claimed reimbursement of medical expenditure paid to the Director and employee of the company namely Shri Anand Sagar as business expenditure u/s.37 of the IT Act. I found that medical expenditure of Director cum employee was for hospitalization and surgery of Director who had suffered a paralytic stroke and underwent DBS operation at Kokilaben Dhirubhai Ambani Hospital. However, assessing officer considered the above expenditure as personal in nature and treated it not incurr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion of wide import and includes such expenditure, a prudent businessman incurs for the purpose of business or profession. In the present case Mr. Anand Sagar, a famous film director is looking after the TV serial direction produced by the assessee company. Thus the well being of such a personality is of utmost important for the business of the assessee company. In the circumstances, keeping the principal of commercial expediency the assessee incurred the expenditure on his hospitalisation and surgery and thus such expenditure incurred by the assessee company was for the purpose of the business of the assessee and in true sense of commercial expediency and thus the same is correctly claimed as expenditure u/s 37(1) and be allowed fully. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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