The Delhi High Court has rejected the claim of Senior Advocate Shanti Bhushan that his heart is a ‘Plant’. The Delhi High Court emotionally said “No two individuals deal with matters of heart similarly; often confounded, as to how to deal with it – which is why a famous lyricists expounds on this very peculiar quandary thus: DIL-E-NADAN TUJHE HUA KYA HAI AKHIR ESS DARD KE DAWA KYA HAI. (Here heart is personified. It is asked of it what ails it? What is the remedy for the malady).”

The events leading to the case are as follows. In the assessment year 1983-84, Shanti Bhushan had filed an income tax return declaring a total income of Rs 2,15,520/-. This return was later revised and in that, he had claimed as expense a sum of Rs. 1,74,000/- incurred by him on coronary surgery performed on him in Houston, USA.

Mr. Bhushan claimed waiver under Section 31 of the Income Tax Act (IT Act) which, inter-alia permits deduction of expenditure incurred on current repairs of plant. His stand was that a human heart is in the nature of a ‘plant’ and therefore the expenditure incurred by him on the coronary surgery was akin to expenses incurred on current repairs of a plant.

The Assessing Officer rejected the claim under Section 31 and Section 37 of the I.T. Act. An appeal was filed before the Commissioner of Income Tax (CIT) against the order of the Assessing Officer. The CIT upheld the order of the Assessing Officer. Aggrieved by this, further appeal was filed before the Income Tax Appellate Tribunal (ITAT) by Shanthi Bhushan.

The Tribunal also rejected the claim under Section 31 relying on the test laid down by the Gujarat High Court in the case of CIT vs. Elecon Engineering Co. Ltd. (1974) 96 ITR 672 (Guj.). It said “for the expenses incurred on the repair of the plant to be allowed, the assessee would have to demonstrably show that the plant was used as a “tool” with which he carried out his business or professional activity.” The Tribunal came to the conclusion that the assessee could not have demonstrated that heart was used as a “tool of his trade” since the heart was even otherwise an organ, essential for normal and healthy functioning of a human body, and not necessarily for a professional, such as a lawyer.

An appeal was filed before the Delhi High Court, which was also rejected. The court held that “Firstly if the heart of a human being, as in the case of the assessee, were to be considered a plant, it would necessarily mean that it is an asset which should have found a mention in the assessee’s balance sheet of the previous year in issue, as also, in the earlier years. Apart from the fact that this is admittedly not so, the difficulty that the assessee would face in showing the same in his books of accounts would be of arriving at the cost of acquisition of such an asset. Therefore, in our view before expenses on repair of plant are admitted as a deduction, the plant would necessarily have to be reflected as an asset in the books of accounts. The second ground on which, we are persuaded by the counsel for the revenue not to accept the assessee’s claim is that, even if one were to give the widest meaning to the word ‘plant’ under Section 31 of the IT Act, human heart would still not fall within the definition of the word plant.”

The Delhi High Court observed that “the question raised is the product of experience, deftness and obvious artfulness of the petitioner who is a seasoned, experienced and an eminent Advocate of the country.”  We will have to wait and watch if Shanthi Bhushan will prefer an appeal to the Apex Court against the Delhi HC’s order. Mr. Bhushan has been in the limelight due to his crusade for Judicial Accountability and campaign for Lokapal Bill!

A copy of the judgment is available here.

Shanti Bhushan Medical Expenses

Shanti Bhushan Medical Expenses