Expenses incurred for getting eyes treated cannot be claimed as a professional deduction under the Income Tax (IT) law, the Bombay high court has said.
A lawyer had undergone eye treatment in the US about 20 years ago and asked IT authorities to treat it as a professional deduction. Disagreeing with him, the court gave reference of a few of its lawyers, saying though they were visually impaired they could carry out their work efficiently.
The judges also observed that eyes are important for the human body and essential for efficient survival of a human being. Eyes are, therefore, not only essential for carrying out a business or profession, but also for doing a lot of other things.
While making a reference to lawyers, Justices M S Sanklecha and G S Kulkarni observed, “We have a couple of visually challenged advocates who are very competent in discharging their duties.”
The court reasoned that an improvement in the status of the eyes would have not only helped Dhimant Hiralal Thakar professionally, 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,” they pointed out.
The determining factor the court thought was the fact that 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 judges held.
In 1986-87, Thakar had gone to the US and undergone a pre-operation eye investigation which cost him Rs 43,600. He claimed the amount to be treated as a professional expenditure. But the assessing officer of the IT department passed an order on March 31, 1987, rejecting his claim and terming it a personal expenditure.
Thakar appealed the order, first, before the Commissioner of Income Tax and later before the appellate Tribunal, but failed to get any relief.
When the High Court heard the case, Thakar’s lawyer Nitesh Joshi argued his client would not have been able to carry out his professional commitments without undergoing treatment. “His eyes have a direct nexus with his professional activity,” it was argued.
Joshi stressed that the deduction should be allowed under Section 37 of the IT Act that allows expenditures incurred for business or professional purposes as deductions.
But the revenue department lawyer Suresh Kumar differed from these arguments completely. He said the tax authorities and the Tribunal had rightly rejected Thakar’s claim arguing it was not the case that Thakar could not function as a solicitor or lawyer in the absence of eyes.
It was clear from this argument, he said, eyes had an element of personal use and as a result its treatment could not be construed as a professional expense.
Agreeing with Kumar’s arguments, the court pointed out that the words used in the relevant provision of the IT Act says the expenditure should be wholly and exclusively for the purposes of business. “In this case, the finding of fact is that it is incurred for personal purposes,” the court observed.
- See more at: http://indianexpress.com/article/cities/mumbai/eye-treatment-cant-be-considered-professional-expenditure-bombay-high-court/#sthash.tcSDsu9b.dpuf
A lawyer had undergone eye treatment in the US about 20 years ago and asked IT authorities to treat it as a professional deduction. Disagreeing with him, the court gave reference of a few of its lawyers, saying though they were visually impaired they could carry out their work efficiently.
The judges also observed that eyes are important for the human body and essential for efficient survival of a human being. Eyes are, therefore, not only essential for carrying out a business or profession, but also for doing a lot of other things.
While making a reference to lawyers, Justices M S Sanklecha and G S Kulkarni observed, “We have a couple of visually challenged advocates who are very competent in discharging their duties.”
The court reasoned that an improvement in the status of the eyes would have not only helped Dhimant Hiralal Thakar professionally, 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,” they pointed out.
The determining factor the court thought was the fact that 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 judges held.
In 1986-87, Thakar had gone to the US and undergone a pre-operation eye investigation which cost him Rs 43,600. He claimed the amount to be treated as a professional expenditure. But the assessing officer of the IT department passed an order on March 31, 1987, rejecting his claim and terming it a personal expenditure.
Thakar appealed the order, first, before the Commissioner of Income Tax and later before the appellate Tribunal, but failed to get any relief.
When the High Court heard the case, Thakar’s lawyer Nitesh Joshi argued his client would not have been able to carry out his professional commitments without undergoing treatment. “His eyes have a direct nexus with his professional activity,” it was argued.
Joshi stressed that the deduction should be allowed under Section 37 of the IT Act that allows expenditures incurred for business or professional purposes as deductions.
But the revenue department lawyer Suresh Kumar differed from these arguments completely. He said the tax authorities and the Tribunal had rightly rejected Thakar’s claim arguing it was not the case that Thakar could not function as a solicitor or lawyer in the absence of eyes.
It was clear from this argument, he said, eyes had an element of personal use and as a result its treatment could not be construed as a professional expense.
Agreeing with Kumar’s arguments, the court pointed out that the words used in the relevant provision of the IT Act says the expenditure should be wholly and exclusively for the purposes of business. “In this case, the finding of fact is that it is incurred for personal purposes,” the court observed.
- See more at: http://indianexpress.com/article/cities/mumbai/eye-treatment-cant-be-considered-professional-expenditure-bombay-high-court/#sthash.tcSDsu9b.dpuf
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