ORDER
U.T. Shah, Vice President
1. In this appeal, the assessee is contesting the action of the I.T. authorities in disallowing the claim for deduction of Rs. 1,29,190 being expenses incurred in connection with an open heart surgery undergone by him in USA.
2. The assessee is an individual and is carrying on profession as an actor, that too, as a villain in the film industry. The assessment year is 1982-83 and the relevant previous year ended 31-3-1982.
3. The facts of the case, as summarised in the statement of facts, sent along with the memo of appeal to the CIT (Appeals) read as under :-
(1) Shri Ajit is reputed for his acting in roles of villain in Hindi feature films. This requires performing of various stunt actions by Shri Ajit. He has to be 100% physically fit to give successful performance in such roles. Thus 100% physical fitness is an essential factor in the profession carried on by Shri Ajit from which he earns professional receipts.
(2) Somewhere in 1978 Shri Ajit started getting complaint of Angina Pectoris and so he was under treatment of Dr. Sudhir Naik of Hyderabad and Dr. A.S. Godbole of Bombay, both well known cardiologists. In May 1981 Shri Ajit was facing lot of difficulties in performing his stunt required for his roles in Hindi Feature Films. He, therefore, underwent a thorough inspection again under Dr. Sudhir Naik, who suggested immediate operation for permanent cure and to safevouch successful performance of the stunts necessary for the roles of villain in films. For this purpose they advised him to proceed to USA for this surgery without further delay. He as well Dr. A.S. Godbole advised that the surgery should be performed by Dr. Cooely in Stulkes Hospital, Houston Texas, USA, where Dr. Sudhir Naik himself was attached years before. In fact Dr. Sudhir Naik made arrangements for admission of Shri Ajit in this hospital. Under this expert medical advice Shri Ajit proceeded to Houston Texas, USA to undergo the said operation. He was accompanied, as an attendant, by his son Shri Zahid Ali Khan as per recommendation of the said Dr. Naik. Foreign exchange of 18,550 US Dollars was allowed by the Exchange Controller Authorities of RBI, Bombay who issued in favour of Shri Ajit Permit Numbers EC/BY/ TR/M/1456/19/80/81 of 1-6-1981 for the US $16050 and Number EC/BY/ TR/M/1491/19/80/81 of 9-6-1981 for US $2500 (copies enclosed). Shri Ajit went to Houston on 9th June, 1981 and returned to India on 1-9-1981, after successful open heart surgery performed by Dr. P. Cooely at the hospital mentioned above. Shri Ajit submitted his report of this medical visit to overseas country Texas USA to the Assistant Controller, Exchange Controller Department, Reserve Bank of India, Bombay on 17th September, 1981. The expenses account in detail has been given in this report. A copy of which is enclosed for your ready reference. Out of the sanctioned US $ 18,500 Shri Ajit returned 3,000 US $ to M/s. Thomas Cook India Ltd. (copy of certificate from them is enclosed) from whom he had purchased 18,550 US $ originally. In the details submitted for assessment year 1982-83 the aforesaid medical expenses have been claimed as under :-
Indo Globe Travels Rs. 19,689
Thomas Cook India Ltd. Rs. 1,79,348
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Rs. 1,99,037
Less : Refunded from Thomas Cook India Ltd. Rs. 26,785
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Rs. 1,72,252
Less : 1/4th not relating to film
personality of Shri Ajit treated
as of personal nature Rs. 43,068
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Balance claimed as deduction Rs. 1,29,190
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This claim is made under the provisions of Section 37(1) of the Income-tax Act, 1961 as the expenditure of Rs. 1,29,190 relates exclusively for the purpose of the profession of film act, specially the roles of villain by Shri Ajit.
4. On the aforesaid facts, the assessee claimed deduction of Rs. 1,29,190 both, in the return, as well as at the time of assessment proceedings on the grounds that the said expenditure was incurred fully and exclusively for the purposes of the profession carried on by him, that after the operation he was 100% fit and could successfully act as a villain in number of films and that the ratio laid down in the case of Prince v. Mapp (Inspector of Taxes) [1971] 79 ITR 671 (Ch. D.) clearly supports his claim.
5. The ITO, however, did not accept the assessee’s contentions. According to him, the case of Prince (supra) did not support the assessee’s stand. Relying on certain observations, in the case of Norman v. Colder (Inspector of Taxes) [1945113 ITR (Suppl.) 21 (CA), the ITO disallowed the assessee’s claim for deduction of Rs. 1,29,190 in the following manner :-
5. In the present case the operation was more essential to enable the assessee to live as a healthy man and it was only when this was achieved that he could indulge in his profession. Therefore, the expenditure incurred on medical expenses relating to open heart surgery at USA is not wholly and exclusively for his profession. In fact the expenses are to be considered as of personal expenses and thus the assessee’s claim regarding deduction of expenses cannot be accepted and accordingly the claim of the assessee is hereby rejected.
6. In appeal before the CIT (Appeals), the assessee once again pressed for the deduction of Rs. 1,29,190. However, the CIT (Appeals) preferred to uphold the action of the ITO as under :-
4. On perusal of the orders of the ITO and consideration of the submissions made by the A.R., I am of the opinion that the conclusion arrived at by the ITO after detailed consideration of the facts of the case and the submissions, as well as case laws cited in the assessment orders cannot be said to be unjustified. I agree with the ITO’s observations that the operation was more essential for the assessee to live as a healthy man. The medical expenses incurred and claimed as a deduction cannot therefore be accepted as spent wholly and exclusively for his profession. The expenditure is therefore in the nature of personal expenses and cannot be accepted as incurred wholly and exclusively for professional purpose. Under the above circumstances, the orders of the ITO is upheld and the appeal is dismissed.
7. Being aggrieved by the order of the CIT (Appeals), the assessee has come up in appeal before the Tribunal. The learned counsel for the assessee reiterated the submissions, which were made before the IT authorities and strongly urged that they should have accepted the assessee’s claim for deduction of Rs. 1,29,190. In this connection, he referred to the decision, in the case of Prince (supra) more particularly, the observations appearing at pages 676-677 of the report. He, however, was fair enough to state that the decision in that case had gone against the tax-payer, as the tax-payer was playing guitar as a hobby and not as a profession. According to him, if the tax-payer in that case was carrying on profession of playing guitar only, he would have got the decision in his favour in respect of the expenditure incurred on the operation of the finger, with which he was playing the guitar. However, since in the instant case, the assessee was engaged as an actor on full-time basis, the expenditure incurred on his operation was wholly and exclusively laid out for the purpose of his profession. The learned counsel for the assessee was fair enough to state that he is aware of the decision of the Court of Appeal, in the case of Norman (supra). However, he hastened to state that since that decision was explained by Pennycuick, J. in the case of Prince (supra), we should follow the latter decision and decide the appeal, in favour of the assessee. According to the learned counsel for the assessee, since partial allowance is possible under the Income-tax Act, 1961, the assessee should be allowed a part of the expenditure incurred by him, if we are not prepared to accept his claim for deduction of the entire amount. In this connection, he emphasized the fact that but for the operation, the assessee would have found it extremely difficult, if not impossible, to act as a villain and thereby his source of income would have been dried up. Relying on the decision of the Hon’ble Supreme Court, in the case of CIT v. Malayalam Plantations Ltd. [1964] 53 ITR 140, he submitted that since the expression, ‘for the purpose of business’ is wider in scope than the expression ‘for the purpose of earning profits’, the assessee’s claim for deduction of the entire amount of Rs. 1,29,190 should be accepted. Relying on the decision of the Hon’ble Supreme Court, in the cases of Sassoon J. David & Co. (P.) Ltd. v. CIT [1979] 118 ITR 261, CIT v. Delhi Safe Deposit Co. Ltd. [19821 133 ITR 756 and Indian Aluminium Co. Ltd. v. CIT \ 19721 84 ITR 735, he submitted that since the expenditure incurred by the assessee was in respect of his profit earning apparatus, the same should be treated as expenditure incurred wholly and exclusively for the purpose of the profession and should, therefore, be allowed under Section 37(1) of the Act. He also relied on the decision of the Hon’ble Bombay High Court, in the case of Mehboob Productions (P.)Ltd. v. CIT[1977] 106 ITR 758, wherein the Hon’ble High Court was pleased to accept the assessee’s claim for deduction of the amount spent for the medical treatment of its director, who had gone to USA to attend the function for the awards by the Academy of Arts and Science, Hollywood. It may be mentioned that Shri Mehboob, director of the said company had gone to USA, as the picture ‘Mother India’ directed by him was one of the foreign films nominated by the Academy. Finally, he relied on the order of the Tribunal, in the case of B.K. Seshu v. ITO [1984] 10 ITD 365 (Hyd.), wherein the assessee, a practising advocate, attended certain conferences of the International Law Association and the International Bar Association held abroad. The assessee’s name was sponsored by the Bar Council of India and he had attended conferences in West European countries. His claim for deduction of the expenditure incurred on foreign tours was accepted by the Tribunal. He, therefore, fervently argued that in the case of a professional like the assessee, a lenient and sympathetic view should be taken, so as to develop law in this regard. He, therefore, urged that we should direct the ITO to accept the assessee’s claim for deduction of Rs. 1,29,190 and modify the assessment accordingly.
8. The learned representative for the department, on the other hand, strongly supported the action of the IT authorities. According to him, the decision in the case of Prince (supra), would not be of much help to the assessee, if the same is read as a whole and minutely. Inviting our attention to the decision of the Hon’ble Supreme Court, in the case of Madhav Prasad Jatia v. CIT [1979] 118 ITR 200, more particularly, the observations appearing at pages 208 and 209 of the Report, he submitted that in the said judgment, the Hon’ble Supreme Court itself has explained its decision, in the case of Malayalam Plantations Ltd. (supra), as under:-
It may comprehend many other acts incidental to the carrying on of the business but, however wide the meaning of the expression may be, its limits are implicit in it; the purpose shall be for the purpose of business, that is to say, the expenditure incurred shall be for the carrying on of the business and the assessee shall incur it in his capacity as a person carrying on the business.
However, since in the instant case, the expenditure incurred in the operation was the personal expenditure of the assessee, not necessarily connected with the carrying of his profession, the assessee would not be entitled to deduction of Rs. 1,29,190. Inviting our attention to the decision of the Hon’ble Bombay High Court, in the case of Mehboob Productions (P.) Ltd. (supra), he submitted that the facts and circumstances obtaining in the instant case are clearly distinguishable from the facts and circumstances obtaining in that case. In the instant case, the assessee had incurred expenditure in his personal capacity, while in the reported case, the expenditure was incurred by the company on its director, who was the spirit behind the existence of Mehboob Productions Pvt. Ltd. He also pointed out that in the reported case, the expenditure was incurred by an assessee, on a person, whose services were indispensable for its very existence. As regards the assessee’s claim for partial allowance of the expenditure incurred by him, the learned representative for the department submitted that the same should not be accepted, as one cannot visualise two hearts, one used for the purpose of the profession and the other used for personal purposes. In this connection, he gave an illustration of a telephone or a motor car, wherein partial allowance is granted to an assessee, if a telephone or a motor car is used for business as well as personal purposes. This is so, because, instead of having two telephones or two cars, one for business purposes and the other for personal purpose, the assessee opts for having one phone or one car for both the purposes. However, in the case of a heart, the situation is altogether different. Therefore, there is no question of apportioning the expenditure into two categories. Finally, he referred to page 2186 of Law on Income-tax by Sampat Iyenger, 8th Edition, to urge that no infirmity could be found in the orders of the IT authorities disallowing the assessee’s claim for deduction of Rs. 1,29,190.
9. We have carefully considered the rival submissions of the parties as well as perused the material already brought on record and we do not find any justification to interfere with the action of the IT authorities. In our opinion, the assessee would not be right in getting support from the decision, in the case of Prince (supra), on the ground that in the said decision, the Court has considered and explained the decision of the Court of Appeal, in the case of Norman (supra). It is pertinent to note that the decision, in the case of Prince (supra), is of the Chancery Division, which is a subordinate Court to the Court of Appeal, which delivered the judgment in the case of Norman (supra). The ITO has already reproduced the relevant portion of the decision, in the case of Norman (supra), which is quite illuminating. In our view, it is difficult to hold that the expenditure incurred by the assessee was nothing but personal in nature. It is the desire to live that the assessee rushed to USA and undergone open heart surgery, the fact that the open heart surgery lengthen the period of his acting in the films was quite incidental. Therefore, it is difficult to hold that the expenditure incurred by the assessee was ‘wholly and exclusively’ for the purpose of the profession carried on by him. The words appearing within the parentheses of Section 37(1) of the Act cannot be ignored. If the expenditure is of a capital nature or personal expenses of the assessee, the same cannot be allowed under Section 37(1) of the Act. Again, the decision in the case of Mehhoob Productions (P.) Ltd. (supra) would not be of any help to the assessee, as in that case, the company had decided to reimburse the entire expenditure incurred by its director on his medical treatment in USA, where he had gone to attend the function of the Academy of Arts and Science, wherein the film ‘Mother India’ produced by the assessee was nominated by the Academy. The Hon’ble High Court held that the expenditure so incurred (reimbursed) by the assessee was wholly and exclusively for the purpose of the business carried on by the assessee. However, in the instant case, like any other individual, the assessee incurred expenditure on getting operated for his heart ailment. In other words, the expenditure incurred by the assessee was purely of personal nature, which does not qualify for deduction under Section 37(1) of the Act. In view of the language used within the parentheses of that section, we can appreciate the hardship of an assessee, engaged in some profession. However, it is not within our domain to stretch the language of the section, with a view to help such an assessee. We entirely agree with the submissions made on behalf of the revenue that there is an inbuilt limit in the language used in Section 37(1) of the Act, as held by the Hon’ble Supreme Court, in the case of Madhav Prasad Jatia (supra). In that case, the Hon’ble Supreme Court held that even though the language used “for the purpose of business” in Section 10(2)(xv) of the Income-tax Act, 1922 I corresponding to Section 37(1) of the Act 1 has to be given wide meaning but the limits are implicit in the said language, namely, the purpose shall be for the purpose of business, that is to say the expenditure incurred shall be for the carrying on of the business and the assessee shall incur it in his capacity as a person carrying on the business. Surely, in the instant case, it is difficult to hold that the assessee had undergone the operation for the purpose of profession. On the contrary, in our view, the assessee had incurred this expenditure, with a desire to live longer. Such desire is definitely personal in nature and cannot be linked with the profession carried on by the assessee. In the very nature of the operation undergone by the assessee, it is difficult to hold that the expenditure incurred by the assessee could be split into two segments, one concerning the profession carried on by him and the other for a desire to live longer. In this view of the matter, we are not prepared to accept the submissions made on behalf of the assessee that at least a part of the expenditure incurred by the assessee should be allowed in computing his professional income. The order of the Tribunal, in the case of B.K. Seshu (supra) would also not be of any help to the assessee, as the facts and circumstances obtaining in the instant case are clearly distinguishable from the one obtaining in that case.
10. For the aforesaid reasons, we have no hesitation in upholding the action of the IT authorities, disallowing the assessee’s claim for deduction of Rs. 1,29,190.
11. In the result, the appeal is dismissed.