Eminent lawyer Shanti Bhushan is making a name for himself as a member of the LokPal Bill drafting committee. He’s also creating palpitations in the courts by moving the Supreme Court to give him income tax deductions for expenses related to his heart surgery.
Although the Delhi High Court broke his heart by dismissing his pleas, Bhushan hasn’t given up the fight. He claims he suffered his heart attack due to his professional work, so the expenses of his heart operation should be deductible, under Section 31 of the Income Tax (I-T) Act.
Bhushan claims that his heart is a “plant” & the expenses are being incurred on “current repairs”. He also claims his professional receipts rose substantially after his operation & it “wholly & exclusively” affected his business, which should fall under Section 31.
Bhushan claims that, monetarily, the decision of the Supreme Court means nothing.He files a return of Rs 10-15 crore every year, so minor surgery costs don’t bother him. He is appealing the decision on a matter of principle.
The high court dismissed his arguments, stating that if the heart were a “plant”, then it should be considered an asset, which should have been disclosed on the assessee’s balance sheet. Furthermore, the “cost of acquisition” of such an asset could never be determined. While the heart is necessary for survival, it doesn’t mean it’s a tool to be used for professional trade or activity.They also stated there was no way to determine how heart surgery had a direct impact on the efficiency of his professional field.
Bhushan countered that if the heart is to be considered an asset, it’s not a “purchased asset”, but is a “God-given gift”. And, if the asset is given free, the cost of repairing it should be able to be deducted.
It’s important to think about the fact that if the apex court rules in Shanti’s favor, it will become law. That will make all expenses on such heart surgeries by professionals tax deductible. The resulting loss of tax revenue could very well give the finance department a heart attack of their own!
