By-Pass Surgery – Possibility of claiming deduction treating as Repairs & Maintenance

–Dil-E-Nadan Tujhe Hua Kya Hai Akhir Ess Dard Ke Dawa Kya Hai.

One can argue over anything and everything. One need to think out of the box, think above & think beyond. Argument may be accepted or may be rejected. But it is sure to give a though to think beyond. Here is one such case.

For any profession, one needs an individual skill. Personal Fitness of a person will be allowing him to perform the task in his/her profession. To be fit, what one needs is a fit heart.

Healthy Heart is sole of Wealthy man. A contention of a layer was Heart of a person shall be treated as a tool with which he carries on his profession.

Is not Heart a Plant and Machinery of his profession and any expenses incurred on it, say by way of By-pass Surgery shall be allowed as deduction u/s 31 of the Income Tax Act, 1961 as Repair and Maintenance to Plant and Machinery?  Or for that matter, part of the expenses over by-pass surgery be treated as expenses for professional purpose as against purely personal expenditure?

This contention of assessee was overruled by the judgment of Delhi Tribunal. The Tribunal’s judgment was that Heart of a person who is engaged in a legal profession can by no stretch of imagination be treated as a tool with which he carries on his profession. Heart is an essential organ of the body which is equally important for all human. In the case of a professional in the legal field, it cannot be said that his professional activities are carried on only by his heart. Heart is essential to live whatever be the profession.

There is yet another aspect of the matter. It is noticeable that, while defining the word ‘plant’ it is expressed as “used for the purpose of the business or profession”. It cannot be said that the assessee, when he is engaged in his professional activities as a lawyer is using his heart for that purpose i.e. for the purpose of giving services. The word “USE” means power or control over a thing which is used. The function of a human heart is involuntary. A human being has no choice in the matter of functioning of his heart unlike some other organs of his body. Therefore, a professional cannot claim that he uses his heart for the purpose of profession.

In the case of the assessee he sharpens his professional skills not by using his heart but by using his brain. Heart functions are involuntary, free from his control and power. He has no choice in the matter of functioning of his heart. So, he cannot be said to have used his heart for the purpose of his profession as if it is a tool in a plant and machinery. Therefore, in the instant case heart of the assessee or his body encompassing the heart cannot be treated as plant for the purpose of claiming Repair and Maintenance.

The primary purpose of the assessee in incurring the expenditure was to live longer with a healthy heart and to avoid the risk of another heart attack. All other considerations including that of earning or augmenting professional income were secondary. The expenditure is, therefore, personal in nature and further the expenditure cannot also be said to have been incurred wholly and exclusively for the purpose of profession. By undergoing by-pass surgery the assessee has only incidentally benefited in pursuing this professional activities. While incurring the expenditure desire to live longer was paramount and predominant. Thus, the expenditure claimed has not been incurred wholly and exclusively for the purpose of the assessee’s profession and that the expenditure is in the nature of personal expenditure.

Therefore, the expenditure is also not allowable under s. 37(1).

Few more important contentions Court have placed are:

1. What is the cost of acquisition of this asset?
2. Where in the balance sheet is he disclosing the asset?
3. Where is he claiming the Depreciation?

 

Interesting judgment is produced hereunder for the fun of the readers:

 

 

 

Shanti Bhushan vs. CIT Delhi High Court

D.N. SHARMA, J.M. :

ORDER

This appeal, filed by the assessee, is directed against the order dt. 26th Sept., 1987 passed by the CIT(A) for the asst. yr. 1983-84.

2. The assessee Shri Shanti Bhushan is a Senior Advocate, practising before the Supreme Court and various High Courts in the country. In 1978 the assessee suffered heart attack and was hospitalized for six weeks. In April 1982, the assessee underwent a coronary by-pass surgery operation in Houston, U.S.A. Before the AO the assessee claimed that an amount of Rs. 1,74,000 incurred on coronary by-pass surgery was an allowable expenditure under s. 31 of the IT Act, 1961. According to the assessee, heart is ‘plant’ within the meaning of s. 31 and, therefore the expenditure incurred on repairs of heart, which is an integral part of the human being, was allowable under s. 31. It was pointed out that coronary by-pass surgery has directly improved the competence of the assessee and his earning capacity. It was pointed out that during the asst. yr. 1982-83 the gross receipt of the assessee was to the tune of Rs. 3.55 lacs and after by-pass surgery the gross receipts for the asst. yrs. 1983-84 to 1985-86 amounted to Rs. 5.1 lacs, Rs. 10.8 lacs and Rs. 12.15 lacs respectively. During the asst. yr. 1986-87 gross receipts were expected to be over Rs. 20 lacs. The ITO was, however, of the view that human body cannot be treated as plant and that expenditure incurred on coronary by-pass surgery was not an allowable deduction under s. 31.
3. Before the ITO it was contended on behalf of the assessee, in the alternative, that the claim for deduction of the expenditure incurred on coronary by-pass surgery was allowable under s. 37(1). The ITO was of the view that the expenditure was not incurred wholly and exclusively for the purpose of business or profession and that the expenditure being personal in nature was not allowable under s. 37.
4. The matter was carried in appeal before the CIT(A), who agreed with the view expressed by the ITO that the deduction claimed was not allowable under s. 31 r/w s. 43(3) of the IT Act, 1961. Relying on the decision in Norman vs. Golder (Inspector of Taxes) (1945) 13 ITR (Suppl.) 21 (CA) and Prince vs. MAPP (Inspector of Taxes) (1971) 79 ITR 671 (Ch.D.) the CIT(A) further held that the expenditure was not even allowable under s. 37.
5. Aggrieved, the assessee has now come up in second appeal before the Tribunal.
6. Shri Shanti Bhushan himself argued his case. It was contended that with an impaired heart he would not have been able to withstand the strain of his professional activities. For effective performance of his professional activities it was essential for him to undergo to coronary by-pass surgery.

He submitted that with an impaired heart though he would have lived a sedentary life he would not have been able to carry on his professional activities efficiently.

According to him coronary by-pass operation undergone by him was not a life saving operation. It was required to carry on his profession more efficiently and actively. As an active professional, he has to travel extensively all over the country to appear before various High Courts. In this connection our attention was invited to p. 6 of the paper book filed by the assessee which contains a chart of his professional receipts for the asst. yrs. 1982-83 to 1992-93. It was pointed out, from this chart, that before the operation his professional receipts were above Rs. 3.55 lacs in the asst. yr. 1982-83 but after the operation there was a steady rise in his professional receipts from 10.80 lacs in the asst. yr. 1984-85 to Rs. 106.87 lacs in the asst. yr. 1992-93. Thus, with the improvement in his heart condition he was able to improve his profession so enormously and, therefore, the expenditure incurred on by-pass surgery was wholly and exclusively for the purpose of profession and profession alone and not for his life, and, therefore, an allowable deduction under s. 37(1). In this connection he drew analogy by pointing out that the expenditure incurred by a company on the medical treatment of a director or an employee when was an allowable deduction under s. 37(1) there is no reason why the medical expense on the person of a professional lawyer be not treated on par. In support of this contention reliance was placed on the decision of the Bombay High Court in Mehboob Productions (P.) Ltd. vs. CIT (1977) 106 ITR 758 (Bom). In support of the contention that the expenditure helped him in earning his professional income and, therefore, the expenditure was expended wholly and exclusively for the purpose of his profession, reliance has been placed on the decision of the Bombay High Court in Tata Sons Ltd. vs. CIT (1950) 18 ITR 460 (Bom). According to Shri Shanti Bhushan, if the expenditure had incidentally benefited him in his individual capacity it would still be an expenditure incurred wholly and exclusively for the purpose of his profession and drew support for this proposition from the decision of the Madras High Court in the case of Waterfall Estates Ltd. vs. CIT (1980) 16 CTR (Mad) 289 : (1981) 131 ITR 223 (Mad). It was next submitted that had he not incurred the expenditure on by-pass surgery his professional career would have come to an end. The expenditure incurred for preventing extinction of the profession was wholly and exclusively laid out for the purpose of business. In support of this contention he placed reliance on the decision of the Supreme Court in the case of CIT vs. Royal Calcutta Turf Club (1961) 41 ITR 414 (SC).

7. Shri Shanti Bhushan then claimed that the expenditure was allowable even or alternatively under s. 31. Elaborating his argument he submitted that in the context of the provisions of s. 31, his heart was a “plant” within the meaning of that section and, therefore, expenses incurred on the repairs of the heart were allowable under s. 31. In this connection our attention was invited to the inclusive definition of “plant” given in s. 43(3). It was submitted that the word “plant” as used in s. 43(3) and used in s. 31, should be given a wide and broad meaning as has been held by Their Lordships of the Supreme Court in CIT vs. Taj Mahal Hotel 1973 CTR (SC) 480 : (1971) 82 ITR 44 (SC), wherein sanitary and pipe-line fittings installed in a hotel building were held to be “plant” as defined in s. 10(5) in the IT Act, 1922.
8. Shri Shanti Bhushan then submitted that if a living being such as a horse could be treated as a “plant” within the meaning of s. 31 there was no reason why human heart cannot also be treated as a “plant”, if it was used for the purpose of carrying on the profession of a professional. In support of his arguments, Shri Shanti Bhushan gave examples of a gitarist and a professional cricketer. He pointed out that a professional gitarist uses his fingers to play gitar and a cricketer, if he is a bowler uses his fingers to spin the ball. In both these cases, if fingers of the professionals are injured they would be entitled to claim expenses under s. 31 as in their cases fingers would be treated as “plant” within the meaning of s. 31. Shri Shanti Bhushan then gave example of a vocalist and an instrumentalist. He pointed out that if the instrument of a professional instrumentalist is damaged, and the instrument is repaired, the instrumentalist as a professional would be entitled to the deduction of the expenditure so incurred in the computation of his professional income. On the same basis, if the vocal cord of a vocalist is impaired, the expenditure incurred on the repairs of the vocal cord should be an allowable deduction under s. 31 as in the case of a instrumentalist. Vocal cord is an in built instrument and is, therefore a “plant” within the meaning of s. 31 as much as an instrument in the case of an instrumentalist. He submitted that on parity there is no reason why in the case of a vocalist expenditure on repairs of his vocal cord should not be allowed, when similar expenditure incurred on repairs of an instrument is allowable in the case of a professional instrumentalist.
9. Reliance has been placed on the decision of the Gujarat High Court in the case of CIT vs. Elecon Engg. Co. Ltd. (1974) 96 ITR 672 (Guj) which has been affirmed by the Supreme Court in CIT vs. Elecon Engg. Co. Ltd (1987) 166 ITR 66 (SC). Reliance has also been placed on the decision of the Supreme Court in Scientific Engg. House (P.) Ltd. vs. CIT (1985) 49 CTR (SC) 386 : (1986) 157 ITR 86 (SC).
10. According to Shri Shanti Bhushan the two decisions relied upon by the CIT(A) while rejecting his claim for deduction, are not apposite and are not applicable to the facts of the case in hand.
11. Thus, the sum and substance of the arguments advanced by Shri Shanti Bhushan is that the expenditure incurred on coronary by-pass heart surgery is allowable under s. 37 and/or also under s. 31.
12. Learned Departmental Representative, on the other hand, supported the orders of the authorities below. He contended that the primary object of the assessee in incurring the expenditure on coronary by-pass surgery was to keep his body fit. The dominant purpose of incurring the expenditure was the desire to live longer and not to earn or augment professional income. In this connection he pointed out that heart is an essential part of the human body and its functioning is necessary for all human beings irrespective of the fact whether they were engaged in any professional activities or are leading an inactive life. He then contended that the heart of a professional cannot be said to be his machinery or plant with which he carries on his professional activities. He also contended that the ‘inclusive’ definition of plant as given in s. 43(3) shows that articles should fall within the definition of “plant” and should be in the nature of machinery and equipment. According to the learned Departmental Representative the decisions cited by the CIT(A) fully covered the controversy in favour of the Revenue.
13. According to the submissions made on behalf of the Revenue, heart or human body of a professional, engaged in legal profession, cannot be regarded as plant within the meaning of s. 31 r/w s. 43(3) and, therefore, the claim for expenditure was not at all allowable under this section.
14. It was next contended by the learned Departmental Representative that the expenditure was also not allowable under s. 37(1) as it was purely personal expenditure and was not expended either wholly or exclusively for the purpose of profession. He reiterated that the dominant object of incurring the expenditure by the assessee was to prolong life and not to earn or augment his professional income. It is an outcome with which the expenditure incurred has no concern. The expenditure, according to the learned Departmental Representative, was remotely connected with the money earning capacity of the assessee. He pointed out that social recognition and status as a senior advocate was the ambition to achieve which the profession was carried on by the assessee and for this reason also the expenditure was purely of personal nature and hence was not allowable under s. 37(1). Reliance has been placed on the decision of the Supreme Court in Raja Jagdambika Pratap Narain Singh vs. CBDT 1975 CTR (SC) 206 : (1975) 100 ITR 698 (SC).
15. In reply, Shri Shanti Bhushan submitted that the function of a by-pass operation is to restore full supply of blood to heart. The real motivation in incurring the expenditure on by-pass surgery was not to live longer but to enable himself to continue his professional activities efficiently and effectively. That was how the arguments proceeded and concluded.
16. We have considered the submissions made by the assessee and by the learned Departmental Representative and have gone through the record of the case. Sec. 31 reads as under :

“In respect of repairs and insurance of machinery, plant or furniture used for the purposes of the business or profession, the following deductions shall be allowed

(i) the amount paid on account of current repairs thereto ;

(ii) the amount of any premium paid in respect of insurance against risk of damage or destruction thereof”.

17. The word “plant” is defined in s. 43(3). It includes “ships, vehicles, books, scientific apparatus and surgical equipment used for the purposes of the business or profession.”
18. According to the assessee, since s. 43(3) gives only an inclusive definition, a wider meaning should be assigned to the word “plant”. The definition of “plant” as given in s. 43(3) is similar to the definition of this word as given in s. 10(5) of the IT Act, 1922. In the case of Taj Mahal Hotel (supra) their Lordships have observed that the very fact that even books have been included shows that the meaning intended to be given to “plant” is wide. The word “includes” is often used in interpretation clauses in order to enlarge the meaning of the words or phrases occurring in the body of the statute. When it is so used, these words and phrases must be construed as comprehending not only such things as they signify according to their nature and import, but also those things which the interpretation clause declares that they shall include.
19. Referring to the case of J. Lyons & Co. Ltd. vs. Attorney General (1944) Ch. 281, relied upon by the Revenue in that case, it was observed by the Hon’ble Supreme Court that apart from being distinguishable, it hardly supported the contention of the appellant. In that case it was held that electric lamps and fittings in a tea shop were not part of the apparatus used for carrying on the business but were part of the setting in which the business was carried on and, therefore, were not “plant” within the meaning of certain provisions of the War Damage Act,1943.Their Lordships then cited, with approval, the decision of the Court of Appeal in Jarrold (Inspector of Taxes) vs. John Good & Sons Ltd. (1963) WLR 214. In that case the assessee’s business required that its office accommodation should be capable of sub-division into a number of rooms varying in size etc., according to the requirement from time to time of the agencies which it carried on. The office accommodation consisted of a large open floor space in which partition could be erected so as to sub-divide the floor space into a number of rooms of any size,. Certain partitions were made which were screwed to the floor and ceiling only and could be easily moved if it was desired to alter the size or number of the rooms. It was held that the partitions were ‘plant’ as they were used in the carrying out of the company’s trade or business. Adverting to the facts in the case of Taj Mahal Hotel, their Lordships pointed out that the business of a hotelier is carried on by adopting a building or premises in a suitable way to be used as a residential hotel where visitors come and stay and where there is arrangement for meals and other amenities are provided for their comfort and convenience. To have sanitary fittings etc. in a bath room is one of the essential amenities or convenience which are normally provided in any good hotel, in the present times. It was held that if the partitions in Jarrolds case (supra) could be used for having business of the trader, it is incomprehensible how sanitary fittings could be said to have no connection with the business of the hotelier. It was held that sanitary fittings in the bath room in a hotel are “plant” within s. 10(2)(vib) r/w s. 10(2)(5).
20. Their Lordships of the Gujarat High Court in the case of Elecon Engg. Co. Ltd. (supra) after extensive reviewing the case law on the topic held that drawings and patterns by themselves did not perform any mechanical operations or process which constitute know-how and are fundamental to the assessee’s manufacturing business’ are “plant”. We cannot do better than quote the following passage from the said decision of the Gujarat High Court occurring at p. 698 of the report :—

“On reviewing these authorities, a broad consensus emerges from which the essential characteristics of plant can be clearly gleaned. The word ‘plant’ in its ordinary meaning, is a word of wide import and in the context of s. 32 it must be broadly construed. It includes any article or object, fixed or movable, live or dead, used by a businessman for carrying on his business. It is not necessarily confined to an apparatus which is used for mechanical operations or processes or is employed in mechanical or industrial business. It would not, however, cover the stock-in-trade, that is, goods bought or made for sale by a businessman. It would also not include an article which is merely a part of the premises in which the business in carried on as distinguished from a part of the plant with which the business is carried on. An article to qualify as plant must furthermore have some degree of durability and that which is quickly consumed or worn out in the course of a few operations or within a short time cannot properly be called ‘plant’. But an article would not be any the less plant because it is small in size or cheep in value or a large quantity thereof is consumed while being employed in carrying on business. In the ultimate analysis the inquiry which must be made is as to what operation the apparatus performer in the assessee’s business. The relevant test to be applied is : Does it fulfil the function of plant in the assessee’s trading activity ? Is it the tool of the taxpayer’s trade ? If it is, then it is plant no matter that it is not very long-lasting or does not contain working parts such as a machine does and plays a merely passive role in the accomplishment of the trading purpose.”

This decision has been affirmed by the Hon’ble Supreme Court in Elecon Engg Co. Ltd.’s case (supra) and has also been approved in the case of Scientific Engg. House P. Ltd. (supra) In this case their Lordships approvingly cited the decision in Yarmouth vs. France (1987) 19 QBD 647, a case in which it was decided that a cart horse was “plant” within the meaning of s. 1(1) of the Employers’ Liability Act, 1880. Their Lordships quoted the following passage occurring at p. 658 of the Report :

“There is no definition of plant in the Act ; but in its ordinary sense, it includes whatever apparatus is used by a businessman for carrying on his business, —not his stock-in-trade which he buys or makes for sale ; but all goods and chattels, fixed or movable, live or dead, which he keeps for permanent employment in his business.”

It would be useful to reproduce below the following passage occurring at p. 96 of the Report :

“In other words, plant would include any article or object fixed or movable, live or dead, used by a businessman for carrying on his business and it is not necessarily confined to an apparatus which is used for mechanical operations or processes or is employed in mechanical or industrial business. In order to qualify as plant, the article must have some degree of durability, as for instance, in Hinton vs. Maden & Ireland Ltd. (1960) 39 ITR 357 (HL), knives and lasts having an average life of three years used in manufacturing shoes were held to be plant. In CIT vs. Taj Mahal Hotel 1973 CTR (SC) 480 : (1971) 82 ITR 44 (SC) the respondent, which ran a hotel, installed sanitary and pipeline fittings in one of its branches in respect whereof it claimed development rebate and the question was whether the sanitary and pipeline fittings installed fell within the definition of plant given in s. 10(5) of the 1922 Act which was similar to the definition given in s. 43(3) of the 1961 Act and this Court after approving the definition of plant given by Lindley L.J. in Yarmouth vs. France (1987) 19 QBD 647, as expounded in Jarrold vs. John Good and Sons Ltd. (1962) 40 TC 681 (CA), held that sanitary and pipeline fittings fell within the definition of plant.”

21. In order to ascertain whether a particular article or object is “plant” their Lordships laid down the following test :

“Does the article fulfil the function of a plant in the assessee’s trading activity ? Is it a tool of his trade with which he carries on his business ? If the answer is in the affirmative, it will be a plant.”

22. We have to apply the functional test as laid down by their Lordships of the Supreme Court in the aforesaid case to the case in hand. Is heart a tool with which the assessee carried on his profession? The answer obviously would be “no”. Heart of a person who is engaged in a legal profession can by no stretch of imagination be treated as a tool with which he carries on his profession. Heart is an essential organ of the body and its normal functioning is as much necessary for a professional man as it is for a person who is not leading an active life and is not engaged in any gainful activity. A person is capable of carrying on any business or profession so long as he is alive and to keep himself alive his heart must function, but that does not mean that heart becomes a tool or “plant” with which he carries on his business or professional activity. Examples of a cricketer, a gitarist and a vocalist cited by the assessee are not apposite. In the case of a gitarist he uses his fingers dexterously in playing gitar. Similarly, a bowler uses his fingers in spinning a cricket ball. A vocalist uses his vocal cord while rendering a song. In these cases professional activities of a gitarist or cricketer are carried on by fingers and in case of a vocalist, by his voice. However, in the case of a professional in the legal field it cannot be said that his professional activities are carried on only by his heart. Heart is essential to live whatever be the profession. So, applying the functional test as laid out by the Hon’ble Supreme Court in the aforesaid case it is not possible to hold that in the case of the assessee he uses his heart as a tool with which he carried on his professional activities and consequently it cannot be regarded as a plant within the meaning of s. 31 r/w s. 43(3).
23. There is yet another aspect of the matter. It is noticeable that in s. 43(3) defining the word ‘plant’ as also in s. 31 the expression used is “used for the purpose of the business or profession”. Dictionary meaning of the word “used” when used as verb is—

“to put to some purpose : to avail oneself of : to observe, practise, follow : to resort to (a place) to behave, comport (oneself) : to habituate : to treat or behave towards to make use of a person.”

It cannot be said that the assessee, when he is engaged in his professional activities as a lawyer is using his heart for that purpose. As the dictionary meaning indicates, it is only when a person having power or control over a thing which is used, can be said to have used that thing. The function of a human heart is involuntary. A human being has no choice in the matter of functioning of his heart unlike some other organs of his body. He can use at will his fingers as a gitarist or as a cricketer. He can use his vocal cord at will to render a song. He can control his voice and by long practice and become a recognised vocalist. Similarly, a gitarist or a cricketer by long practice, can be a successful gitarist or cricketer by using his fingers in the manner he likes. Some can’t be said of heart. A man cannot stop or regulate the functioning of his heart or use it at will to suit his purpose. Since the functioning of heart is involuntary i.e., not within the power or control of an individual, he cannot be said to have “used” his heart for any specific purpose or activity, except to live and to be alive. Therefore, a professional cannot claim that he uses his heart for the purpose of profession. In the case of the assessee he sharpens his professional skills not by using his heart but by using his brain. Heart functions are involuntary, free from his control and power. He has no choice in the matter of functioning of his heart. So, he cannot be said to have used his heart for the purpose of his profession as if it is a tool in a plant and machinery.

24. The Court of Appeal in the case of Norman (supra) held that Taxpayer’s own body cannot be regarded as a plant. An article or object used by a tax-payer for the purpose of his business or profession can be regarded as a plant within the meaning of s. 31 but for that purpose that article or object has to be something distinct and separate from the person using it. We are, therefore, firmly of the view that in the instant case heart of the assessee or his body encompassing the heart cannot be treated as plant for the purpose of s. 31.
25. Let us now examine the assessee’s claim for deduction in respect of the expenditure incurred by him on by-pass surgery under s. 37(1). Under s. 37(1) any expenditure not being in the nature of capital expenditure or personal expenses of the assessee, laid out or expended wholly and exclusively for the purpose of business or profession shall be allowed in computation of the income chargeable under the head “Profits & gains of business or profession”. The assessee’s contention is that his primary purpose of undergoing by-pass surgery in Houston was to earn and augment his professional income by engaging himself in professional activities. According to the assessee’s by-pass surgery was not necessary for saving his life and so, the real motivation in undergoing by-pass surgery was not to live longer but to carry on his professional activities effectively and efficiently. Thus, according to the assessee, the expenditure was incurred wholly and exclusively for the purpose of his profession and the expenditure is not personal in nature.
26. Nobody likes to live with an impaired heart. Even to live a sedentary life one would wish to have a healthy heart. In the case of the assessee if he had not undergone by-pass surgery he would have run the risk of another heart attack in view of the impaired condition of his heart. To live longer is a human instinct and motivated by this instinct the assessee incurred expenses on by-pass surgery. The primary purpose of the assessee in incurring the expenditure, was to live longer with a healthy heart and to avoid the risk of another heart attack. All other considerations including that of earning or augmenting professional income were secondary. Even if such a desire lived in his bosom, that is in a way purely personal and in the realm of seeking self as there is no obligation attached to the State, to make a man perfect in health in order that he earns more income for the State. State is interested in tax, if a person earns income. It is not interested in forcing people to earn for its income. The expenditure is, therefore, personal in nature and further the expenditure cannot also be said to have been incurred wholly and exclusively for the purpose of profession. By undergoing by-pass surgery the assessee has only incidentally benefited in pursuing this professional activities. While incurring the expenditure desire to live longer was paramount and predominant. In Norman’s case (supra) the assessee claimed deduction in respect of medical expenses incurred because he had been made ill by unhealthy working conditions while carrying on his profession as a short-hand writer. It was held that the medical expenses were expended for domestic or private purpose distinct from the purpose of trade, or profession. The expenses of that kind are not wholly and exclusively laid out for the trade, profession employment or vocation. They are laid out in part for the advantage and benefit of the taxpayer as a living human being.
27. Decisions of the Madras High Court in Waterfall Estates Ltd.’s case (supra) and of the Supreme Court in Royal Calcutta Turf Club’s case (supra) cited by the assessee, are not applicable to the facts of the case in hand.
28. The assessee has also relied on the decision of the Bombay High Court in Mehboob Productions (P.) Ltd.’s (supra). In that case it was found as a fact that the decision of the Board of Directors of the assessee-company to reimburse the medical expenses of its director who was admittedly the driving force of the company, was based on the principles of commercial expediency. It was on the facts of that case that it was held that the entire expenses on medical treatment of the director were allowable.
29. This case is clearly distinguishable on facts. A company and its director are two separate and distinct entities. The expenditure incurred by a company for the medical treatment of its director could on the facts and circumstances of a case be said to have been laid out wholly and exclusively for the purpose of business of the company. So far as the company is concerned the expenses cannot be said to be personal in nature. The assessee in our opinion cannot derive any benefit from the decision of the Bombay High Court in the said case.
30. We are thus firmly of the opinion that the expenditure claimed has not been incurred wholly and exclusively for the purpose of the assessee’s profession and that the expenditure is in the nature of personal expenditure. Therefore, the expenditure is also not allowable under s. 37(1).
31. For the foregoing reason the appeal is dismissed.

 

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