Dr. Anvay Vinayak Mulay, Pune v. ITO, Ward 5(3), Pune, Pune

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B PUNE BEFORE SHRI I C SUDHIR JUDICIAL MEMBER AND SHRI G.S. PANNU ACCOUNTANT MEMBER ITA NO. 213/PN/09 (ASSTT. YEAR: 2003-04) DR ANVAY VINAYAK MULAY KSHANTI BHARAT KUNJ 2 APPELLANT ERANDWANA PUNE PAN AETPM8980L VS. INCOME-TAX OFFICER RESPONDENT WARD 5(3) PUNE APPELLANT BY : SHRI S.N DOSHI RESPONDENT BY : SHRI HEMANTKUMAR C LEUVA ORDER PER G.S. PANNU A.M: THIS IS AN APPEAL BY THE ASSESSEE DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) II PUNE DATE D 20.01.2009 WHICH IN TURN HAS ARISEN FROM ORDER OF THE ASSESSING OFFIC ER DATED 20.2.2006 PASSED UNDER SECTION 143(3) OF THE INCOME-TAX ACT 1961 (I N SHORT THE ACT) PERTAINING TO THE ASSESSMENT YEAR 2003-04. 2. FIRST GROUND OF APPEAL RAISED BY THE ASSESSEE PE RTAINS TO THE DISALLOWANCE OF RS 6 06 750/- ON ACCOUNT OF NON-GEN UINENESS OF THE PAYMENT MADE TO ASSOCIATE DOCTORS AND OTHER STAFF. THE BRIE F FACTS RELATING TO THIS ISSUE ARE THAT THE ASSESSEE IS A CARDIAC SURGEON. DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE WAS PRACTICING IN THREE DIFFERENT CITIES I.E. SURAT AURANGABAD AND PUNE. HE DERIVED GROSS PROFESSIONAL INCOME OF RS 53 93 193/- WHEREAS NET PROFESSIONAL RECEIPTS OFFE RED TO TAX WERE RS 30 32 053/-. OUT OF THE TOTAL RECEIPTS THE ASSESSE E RECEIVED RS 49 18 356/- FROM SHRI R.D. MEHTA MAHAVIR HEART INSTITUTE SURAT ON ACCOUNT OF SURGICAL OPERATION FEES. THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD CLAIMED A MAJOR EXPENDITURE OF RS 8 06 750/-. ON BEING ASK ED TO EXPLAIN THE CLAIM ITA NO 213/PN/09 DR AN VAY V MULAY PUNE 2 THE ASSESSEE SUBMITTED THAT THE CHARGES INCLUDED PA YMENTS MADE TO THEATRE ASSISTANTS DOCTORS RECOVERY STAFF SISTERS PERFU SIONISTS AND OTHER TEAM MEMBERS REQUIRED FOR HEART SURGERY. IT WAS CLAIMED THAT THE ASSESSEE HAD PAID RS 6 06 754/- IN SURAT AND RS 2 00 000/- IN PU NE. THE ASSESSING OFFICER MADE ENQUIRIES FROM SHRI R D MEHTA MAHAVIR HEART I NSTITUTE SURAT. IT WAS INFORMED BY THE INSTITUTE THAT THE PAYMENTS TO HOSP ITAL STAFF WERE MADE BY THE HOSPITAL AND NOT BY THE ASSESSEE. IT WAS ALSO NOTE D THAT THE DOCTORS TO WHOM ASSESSEE HAS CLAIMED TO HAVE PAID THE PROFESSIONAL CHARGES WERE INDIVIDUAL PROFESSIONALS AND WERE PAID SEPARATELY BY THE INSTI TUTE. ON THESE FACTS THE ASSESSING OFFICER ADDED BACK THIS AMOUNT TO THE TOT AL INCOME. 3. IN APPEAL BEFORE THE COMMISSIONER OF INCOME-TAX (APPEALS) IT WAS SUBMITTED THAT THE ASSESSEE A CARDIAC SURGEON CAR RIED ON HIS PROFESSIONAL ACTIVITY WITH HOSPITALS AT SURAT AURANGABAD AND PU NE AND THAT HIS TOTAL PROFESSIONAL RECEIPTS FROM SURAT HOSPITAL WERE RS 4 9 18 356/- AND THAT HE HAD PAID RS 6 606 750/- TO THE DOCTORS I.E. ASSISTANT SURGEONS ANESTHESIONS PERFUSIONISTS THEATRE ASSISTANTS NURSES AND WARD BOYS WORKING AT SURAT. IT WAS FURTHER SUBMITTED THAT ALL THESE TOGETHER FORME D A TEAM THAT IS NECESSARY FOR CONDUCTING THE SURGERY AND IT WAS A PROFESSIONA L AND BINDING OBLIGATION TO SHARE ASSESSEES PROFESSIONAL FEES WITH ALL THESE P ERSONS WHO ASSISTED HIM DURING AND POST OPERATION CARE. IT WAS FURTHER SUB MITTED THAT THE ASSESSEE WAS ASSOCIATED WITH MAHAVIR HOSPITAL SURAT WHICH BEING A CHARITABLE INSTITUTE SOMETIMES OFFERED A FIXED AMOUNT PACKAGE FOR HEART SURGERY FOR NEEDY PATIENTS. EXPLAINING FURTHER IT WAS STATED T HAT SINCE REPUTATION OF A SURGEON IS RELATED TO PROFESSIONAL SKILLS OPERATIO N SUCCESS OR MORTALITY RATE OF PATIENTS THE ASSESSEE NEEDED PARTICULAR PERFUSIONI STS OR ASSISTANT SURGEONS FOR WHICH HE HAD TO PAY OVER AND ABOVE HOSPITAL PAY MENT TO KEEP THE OPERATION PACKAGE AMOUNT FIXED. IT WAS THEREFORE SUBMITTED THAT THE PAYMENTS WERE THEREFORE ALLOWABLE EXPENDITURE UND ER SECTION 37 OF THE ACT. IT WAS ARGUED THAT THE ASSESSEE WAS NOT CONFRONTED WITH THE LETTER RECEIVED ITA NO 213/PN/09 DR AN VAY V MULAY PUNE 3 FROM MAHAVIR INSTITUTE SURAT AND THEREFORE NO OP PORTUNITY WAS GIVEN BY THE ASSESSING OFFICER TO CONTROVERT THE CONTENTS OF THE LETTER. THE COMMISSIONER OF INCOME-TAX (APPEALS) CALLED FOR A REMAND REPORT FRO M THE ASSESSING OFFICER WITH A DIRECTION TO GIVE AN OPPORTUNITY TO THE ASSE SSEE. THE ASSESSING OFFICER STATED THAT THE CONTENTION OF THE ASSESSEE THAT HE WAS IN SURAT FOR 4 DAYS IN A WEEK ONLY AND THE REST OF DAYS WAS IN PUNE AND AURA NGABAD AND THEREFORE HE REQUIRED ALL THESE SUPPORTING PEOPLE FOR POST OP ERATIVE CARE OF THE PATIENTS WAS NOT TENABLE. IN THE REMAND PROCEEDINGS AS PER THE ASSESSING OFFICER THE ASSESSEE WAS NOT REQUIRED TO PAY ANY AMOUNT OUT OF PROFESSIONAL FEES TO ANY OF THE HOSPITAL STAFF AND DOCTORS SINCE THAT WAS T HE LIABILITY OF THE INSTITUTE AND NOT OF THE ASSESSEE. THE ENTIRE STAFF AND DOCTORS W ERE GETTING THE PAYMENTS FROM THE INSTITUTE ITSELF AND THUS IT WAS NOT THE OBLIGATION OF THE ASSESSEE TO MAKE THESE PAYMENTS. THE ONUS WAS ON THE ASSESSEE T O REBUT THE LETTER OF THE INSTITUTE WHICH HE COULD NOT DO AND ACCORDINGLY THE ASSESSING OFFICER STATED THAT THIS WAS ONE OF THE REASONS WHICH PROMPTED THE ASSESSING OFFICER NOT TO ACCEPT THAT THE PAYMENTS WERE NECESSARY. 4. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSE E AS WELL AS THE REMAND REPORT OF THE ASSESSING OFFICER THE COM MISSIONER OF INCOME-TAX (APPEALS) CAME TO THE CONCLUSION THAT TH E ASSESSEE HAS NOT BEEN ABLE TO REBUT THE CONTENTS OF THE LETTER R ECEIVED FROM MAHAVIR HEART INSTITUTE THAT HE WAS NOT REQUIRED TO PAY ANY AMOUNT OUT OF THE PROFESSIONAL FEES TO ANY ASSISTANTS STA FF PERFUSIONISTS ETC. AS THEY WERE PAID EMPLOYEES OF THE HOSPITAL A ND AS REGARDS THE PAYMENTS TO DOCTORS THEY WERE INDIVIDUAL PROFESSIO NALS WHO WERE PAID SEPARATELY BY THE HOSPITAL. IN SUPPORT OF THE ASSESSEES CONTENTION THAT THE ASSESSING OFFICER IN THE REMAND REPORT HAS NOT DOUBTED THE GENUINENESS OF THE PAYMENT BUT ONLY THE NECESSITY OR CONTRACTUAL OBLIGATIONS FOR MAKING SUCH PAYMENTS A SSESSEE RELIED ON THE DECISION OF THE TRIBUNAL IN THE CASE OF SHRI B. K. JHALA AND ITA NO 213/PN/09 DR AN VAY V MULAY PUNE 4 ASSOCIATES VIDE ITA NO 997/PN/05. RELIANCE WAS ALSO PLACED IN THE CASE OF CIT V ASSOCIATED ELECTRICAL AGENCIES 266 I TR 63 (MAD) AND DECISION OF THE TRIBUNAL REPORTED IN 91 ITD 196 WH EREIN IT HAS BEEN HELD THAT COMMERCIAL EXPEDIENCY NEED NOT NECESSARIL Y HAVE BASIS IN CONTRACTUAL OBLIGATIONS AND EVEN IN CASES WHERE PAY MENTS WERE MADE VOLUNTARILY SUCH PAYMENTS WERE ALLOWABLE UNDE R SECTION 37(1) OF THE ACT. ACCORDING TO THE COMMISSIONER OF INCOME -TAX (APPEALS) THE ASSESSEE HAS FAILED TO PROVE EVEN THE COMMERCIA L EXPEDIENCY BECAUSE THE IMPUGNED PAYMENTS APPEARED TO BE ABSOLU TELY NOT THE OBLIGATION OF THE ASSESSEE FOR HIS PROFESSIONAL WOR K. THE COMMISSIONER OF INCOME-TAX (APPEALS) OBSERVED THAT THE ASSESSING OFFICER HAS NO WHERE CERTIFIED THE GENUINENESS OF T HE PAYMENT IN THE ASSESSMENT ORDER. AS REGARDS SIX CONFIRMATION LETTE RS PRODUCED BY THE ASSESSEE DURING THE APPELLATE PROCEEDINGS THE COMMISSIONER OF INCOME-TAX (APPEALS) NOTICED THAT THE ASSESSEE ACTE D IN A MOST CASUAL MANNER BY SUBMITTING THESE SIX CONFIRMATIONS WHICH WERE NOT PART OF THE LIST OF PAYMENT AND HENCE IRRELEVANT. A S PER THE DETAILED REASONING GIVEN IN THE APPELLATE ORDER THE COMMISS IONER OF INCOME- TAX (APPEALS) HELD THAT THE ASSESSING OFFICER HAS R IGHTLY DISALLOWED THE CLAIM OF THE ASSESSEE BOTH ON ACCOUNT OF GENUIN ENESS AS WELL AS COMMERCIAL EXPEDIENCY AND ACCORDINGLY HE AFFIRMED THE DECISION OF THE ASSESSING OFFICER AGAINST WHICH THE ASSESSEE I S IN APPEAL BEFORE US. 5. BEFORE US THE LEARNED COUNSEL FOR THE APPELLANT VEHEMENTLY ARGUED THAT THE LOWER AUTHORITIES HAVE MIS-DIRECTED THEMSELVES TO DISALLOW THE EXPENDITURE OF RS 6 06 750/- ON ACCOUN T OF PAYMENTS MADE BY THE ASSESSEE TO VARIOUS PROFESSIONALS WHO ASSISTED THE ASSESSEE IN HIS PROFESSIONAL ACTIVITY. IT HAS BEEN SUBMITTED THAT THE ASSESSING OFFICER DID NOT DOUBT THE GENUINENESS OF THE PAYMENTS ITA NO 213/PN/09 DR AN VAY V MULAY PUNE 5 MADE BY THE ASSESSEE TO THE OTHER PROFESSIONALS BU T THE CONTROVERSY WAS LIMITED TO ABOUT THE NECESSITY OF M AKING SUCH PAYMENT. IT WAS SUBMITTED THAT THE LOWER AUTHORITIE S HAVE FAILED TO APPRECIATE THAT THERE IS NO DISPUTE THAT THE PAYMEN TS WERE INDEED MADE AND FURTHER THAT NECESSITY OF INCURRENCE OF EX PENDITURE IS TO BE VIEWED FROM THE POINT OF THE ASSESSEE AND NOT THAT OF THE ASSESSING OFFICER. IT IS ALSO POINTED OUT THAT NONE OF THE RE CIPIENTS ARE RELATED TO THE ASSESSEE AND THE ASSESSEE MADE THE PAYMENTS IN RETURN OF SERVICES RENDERED TO HIM. APART FROM AFORESAID THE LEARNED COUNSEL SUBMITTED THAT THE IMPUGNED EXPENDITURE WAS A NECES SITY INASMUCH AS THE PAYMENTS MADE BY THE ASSESSEE OUT OF HIS OWN PROFESSIONAL RECEIPTS TO THE PROFESSIONALS ENABLED HIM TO RENDER BETTER SERVICES TO THE PATIENTS. THE PAYMENTS WERE MADE TO ENSURE EFFI CIENT POST OPERATION CARE OF THE PATIENTS. EVEN IF THE RECIPIE NTS WERE BEING PAID SEPARATELY BY THE RESPECTIVE HOSPITALS HOWEVER TH E ASSESSEE MADE SUCH PAYMENTS TO COMPENSATE FOR OVERTIME SPENT AND ALSO IN LOOKING AFTER THE PATIENTS OVER AND ABOVE THE DUTIES ASSIGN ED BY THE HOSPITAL. IT WAS SOUGHT TO BE POINTED OUT THAT ALL THIS HELPED THE ASSESSEE TO BOOST UP HIS IMAGE AS A PROFESSIONAL AN D ALSO ENSURE INCREASED SINCERITY OF THE STAFF ASSISTING HIM IN T HE SURGERIES. FOR ALL THE ABOVE REASONS THE ORDERS OF THE LOWER AUTHORIT IES WERE SOUGHT TO BE ASSAILED. IN THE COURSE OF THE HEARING RELIANCE HAS BEEN PLACED ON THE FOLLOWING DECISIONS: (A) SASSOON J. DAVID & CO V CIT 118 ITR 261 (B) AJAY SINGH DEOL V DCIT 91 ITD 196 (MUM). 6. ON THE OTHER HAND THE LEARNED DEPARTMENTAL REPR ESENTATIVE APPEARING FOR THE REVENUE HAS DEFENDED THE ORDERS O F THE LOWER AUTHORITIES BY PLACING RELIANCE ON THE SAME. THE AR GUMENTS TAKEN BY THE LEARNED DEPARTMENTAL REPRESENTATIVE ARE ON THE BASIS OF THE ITA NO 213/PN/09 DR AN VAY V MULAY PUNE 6 REASONINGS ADVANCED BY THE ASSESSING OFFICER AS WEL L AS THE COMMISSIONER OF INCOME-TAX (APPEALS) WHICH WE HAVE ALREADY NOTED PARAGRAPHS 2 TO 4 AND THEREFORE ARE NOT BEING REP EATED FOR THE SAKE OF BREVITY. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFUL LY. IN THIS CASE THE SUM AND SUBSTANCE OF THE DISPUTE RELATES TO THE PAYMENTS MADE BY THE ASSESSEE TO VARIOUS DOCTORS ASSISTANTS AND PARA- MEDICAL STAFF WHO ASSISTED THE ASSESSEE IN CONDUCT OF HEART SURGERIES. THE CLAIM OF THE REVENUE IS THAT SUCH ST AFF WAS PROVIDED BY THE HOSPITALS WHERE THE ASSESSEE CONDUCTED THE S URGERIES AND SUCH PROFESSIONALS WERE ALSO PAID FOR BY THE HOSPIT AL AUTHORITIES AND THEREFORE THERE IS NO JUSTIFICATION FOR THE ASSESS EE TO PAY SUCH PROFESSIONALS OUT OF HIS PROFESSIONAL RECEIPTS. IN SUPPORT THE REVENUE HAS RELIED UPON A COMMUNICATION RECEIVED FR OM ONE OF THE HOSPITALS NAMELY MAHAVIR HEART HOSPITAL SURAT W HERE THE ASSESSEE HAS CONDUCTED SURGERIES AND EARNED PROFESS IONAL RECEIPTS. THERE IS NO DISPUTE BY THE ASSESSEE TO THE FACTUM T HAT THE STATED PROFESSIONALS ASSISTANTS ETC. HAVE BEEN COMPENSATE D BY THE CONCERNED HOSPITALS FOR THEIR SERVICES. HOWEVER TH E CLAIM OF THE ASSESSEE IS THAT SUCH STAFF HAS BEEN PAID BY HIM OV ER AND ABOVE THE AMOUNTS RECEIVED BY THEM FROM THE RESPECTIVE HOSPIT ALS. IN THIS CONTEXT IN OUR VIEW THE BURDEN IS ON THE ASSESSEE TO PROVE THAT AN EXPENDITURE HAS BEEN INCURRED WHOLLY AND EXCLUSIVEL Y FOR THE PURPOSE OF HIS BUSINESS OR PROFESSION. THE COMMUNIC ATION RECEIVED FROM MAHAVIR HEART INSTITUTE SURAT CLAIMING THAT S TATED ASSISTANTS WERE PAID SEPARATELY BY THE INSTITUTE DOES CREATE A DOUBT WITH REGARD TO THE EXPENDITURE CLAIMED BY THE ASSESSEE O N ACCOUNT OF PAYMENTS TO SUCH PROFESSIONALS. FOR THIS REASON IN THIS CASE THE ONUS ON THE ASSESSEE TO PROVE THE INCURRENCE OF EXP ENDITURE IS ALL ITA NO 213/PN/09 DR AN VAY V MULAY PUNE 7 THE MORE ONEROUS. MERELY BECAUSE CERTAIN PAYMENTS H AVE BEEN MADE BY THE ASSESSEE THE SAME WOULD NOT ESTABLISH THE GENUINENESS OR THE INCURRENCE OF SUCH EXPENDITURE I N THE CONTEXT OF SECTION 37(1) OF THE ACT. THE COMMISSIONER OF INCOM E-TAX (APPEALS) IN PARA 2.9 TO 2.11 OF THE IMPUGNED ORDER HAS ALSO REFERRED TO CONFIRMATIONS SOUGHT TO BE OBTAINED BY THE ASSESSEE FROM SUCH RECIPIENTS. THE DISCUSSION CLEARLY SHOWS A FAILURE ON THE PART OF THE ASSESSEE TO SUBSTANTIATE THE PURPOSE OF THE EXPENDI TURE AND THE RENDERING OF SERVICES TO THE ASSESSEE QUA THE IMPUG NED PAYMENTS. THEREFORE ON FACTS ALSO WE FIND NO JUSTIFICATION F OR THE EXPENDITURE CLAIMED BY THE ASSESSEE. IN PRINCIPLE WE ARE IN AG REEMENT WITH ASSESSEE THAT COMMERCIAL EXPEDIENCY OF AN EXPENDITU RE IS TO BE VIEWED FROM THE POINT OF BUSINESSMAN AND NOT THAT O F THE ASSESSING OFFICER. SO HOWEVER IN THE PRESENT CASE THERE IS NO MATERIAL TO SUBSTANTIATE THE PURPOSE OF INCURRENCE OF SUCH EXPE NDITURE AND THEREFORE HAVING REGARD TO THE RELEVANT FACTS AND CIRCUMSTANCES OF THE CASE THE COMMISSIONER OF INCOME-TAX (APPEALS) MADE NO MISTAKE IN SUSTAINING THE ADDITION MADE BY THE ASSE SSING OFFICER. ACCORDINGLY THE DISALLOWANCE OF RS 6 06 750/- ON A CCOUNT OF PAYMENTS MADE TO ASSOCIATE DOCTORS AND OTHER STAFF ETC. IS HEREBY AFFIRMED. IN THE RESULT ON THIS ASPECT THE ASSESS EE FAILS. 8. THE NEXT GROUND RELATES TO THE DISALLOWANCE OF R S 1 51 500/- CLAIMED BY THE ASSESSEE AS EXPENDITURE TOWARDS MED ICINES AND DRUGS. THE ASSESSING OFFICER NOTED THAT AS PER THE INSTITUTES LETTER THE INSTITUTE LOOKED AFTER THE EXPENSES ON DRUGS AN D MEDICINES AND IT WAS NOT ASSESSEES RESPONSIBILITY. THE ASSESSING OFFICER ACCORDINGLY REJECTED THE CLAIM OF THE ASSESSEE. ITA NO 213/PN/09 DR AN VAY V MULAY PUNE 8 9. IN APPEAL BEFORE THE COMMISSIONER OF INCOME-TAX (APPEALS) IT WAS SUBMITTED BY THE ASSESSEE THAT THE MEDICINES AN D DRUGS PURCHASED FROM THE MEDICAL STORES AFFILIATED TO THE INSTITUTE WERE UTILIZED FOR THE BENEFIT OF THE ASSESSEES PATIENTS WHO HAVE BEEN OPERATED BY THE ASSESSEE. IT WAS SUBMITTED THAT SUC H EXPENDITURE HAS DIRECT NEXUS TO THE PROFESSIONAL OBLIGATIONS OF THE ASSESSEE AND NO PRUDENT PROFESSIONAL WOULD INCUR SUCH EXPENSES UNLESS IT IS NECESSARY FOR CARRYING ON THE PROFESSION. ALL THESE SUBMISSIONS DID NOT FIND FAVOUR WITH THE COMMISSIONER OF INCOME-TAX (APPEALS). THE COMMISSIONER OF INCOME-TAX (APPEALS) HELD THAT WHEN THE OPERATION IS BEING HELD IN A PARTICULAR HOSPITAL THE COST TO WARDS DRUGS AND MEDICINE IS CHARGED BY THE HOSPITAL FROM THE CONCER NED PARTIES AND IS NORMALLY THE PART OF THE TOTAL PACKAGE FOR THE S URGERY AND THEREFORE THE CLAIM OF THE ASSESSEE THAT HE HAD TO INCUR EXPENDITURE ON MEDICINES AND DRUGS FROM THE AMOUNT OF PROFESSIO NAL FEES RECEIVED FROM MAHAVIR HEART INSTITUTE COULD NOT BE ACCEPTED. THE COMMISSIONER OF INCOME-TAX (APPEALS) STATED THAT TH E INSTITUTE HAS CATEGORICALLY INFORMED THAT THE DOCTOR DOES NOT HAV E TO INCUR ANY EXPENDITURE OUT OF THE PROFESSIONAL CHARGES PAID TO HIM. IN VIEW OF THESE FACTS THE COMMISSIONER OF INCOME-TAX (APPEAL S) CONFIRMED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. B EING AGGRIEVED ASSESSEE IS IN APPEAL BEFORE US. 10. BEFORE US THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LOWER AUTHORITIES HAVE NOT DOUBTED THE FAC T THAT THIS EXPENDITURE HAS BEEN INCURRED ON MEDICINE AND DRUGS . ACCORDING TO THE LEARNED COUNSEL SUCH INCURRENCE OF EXPENDITURE WHETHER WAS NECESSARY OR OTHERWISE CANNOT BE THE ISSUE FOR DISA LLOWING THE GENUINE EXPENDITURE AS LONG AS IT IS INCURRED WHOLL Y AND EXCLUSIVELY FOR THE PURPOSE OF HIS PROFESSION AS REQUIRED UNDER SECTION 37 OF THE ITA NO 213/PN/09 DR AN VAY V MULAY PUNE 9 ACT. HE THEREFORE PLEADED THAT THE CLAIM OF THE A SSESSEE BE ALLOWED. 11. ON THE OTHER HAND THE LEARNED DEPARTMENTAL REP RESENTATIVE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND S UBMITTED THAT DISALLOWANCE OF THE ASSESSEES CLAIM BY THE LOWER A UTHORITIES WAS JUSTIFIED AND NO INTERFERENCE IS CALLED FOR. 12. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFU LLY. IT IS THE CASE OF ASSESSEE THAT THE IMPUGNED PAYMENT HAS BEEN ACTUALLY MADE TOWARDS PURCHASE OF MEDICINES AND DRUGS WHICH WERE UTILIZED FOR THE BENEFIT OF ASSESSEES PATIENTS. THE ASSESSE E IS A CARDIAC SURGEON AND IT IS POSSIBLE THAT IN THE INTEREST OF HIS PROFESSION AND TO MAINTAIN HIS EXPERTISE AND REPUTATION HE HAD TO PURCHASE THE MEDICINE AND DRUGS TO BE UTILIZED FOR THE TREATMENT OF HIS PATIENTS OVER AND ABOVE THAT IS COVERED IN PACKAGE UNDER CER TAIN BUT EXCEPTIONAL CIRCUMSTANCES IN EMERGENCY CASES. LOOKI NG TO THE PECULIAR CIRCUMSTANCES UNDER WHICH THE IMPUGNED EXP ENDITURE HAS BEEN INCURRED BY THE ASSESSEE ON PURCHASE OF MEDICI NE AND DRUGS IN OUR OPINION THE ASSESSING OFFICER WAS NOT JUSTI FIED IN MAKING THE DISALLOWANCE OF SUCH EXPENDITURE OF RS 1 51 500/-. WE ACCORDINGLY DELETE THE SAID DISALLOWANCE AND ALLOW THIS GROUND OF APPEAL OF THE ASSESSEE. 13. THE LAST GROUND OF APPEAL RELATES TO THE DISALL OWANCE OF FOREIGN TOUR EXPENSES OF RS 1 68 273/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTIC ED THAT THE ASSESSEE HAD CLAIMED FOREIGN TOUR EXPENSES OF RS 1 68 273/-. IT WAS CLAIMED THAT THE AFORESAID EXPENDITURE WAS INCURRED TO ATTEND SEMINARS HELD IN NEW ZEALAND AND GERMANY DETAILS O F WHICH WERE ALSO SUBMITTED. BUT THE ASSESSEE COULD NOT PRODUCE ANY PROOF EXCEPT A COPY OF ATTENDANCE CERTIFICATE IN GERMANY WHICH DID NOT BEAR ITA NO 213/PN/09 DR AN VAY V MULAY PUNE 10 SIGNATURE OF AUTHORIZED PERSON OR A SEAL. REGARDING NEW ZEALAND TOUR IT WAS SUBMITTED THAT THE CORRESPONDENCE WAS MADE THROUGH E- MAIL AND THEREFORE NO DOCUMENTARY PROOF COULD BE PRODUCED. IN VIEW OF THIS THE ASSESSING OFFICER ADDED BACK THE FOREIGN TOUR EXPENSES TREATING IT AS PERSONAL EXPENSES OF THE AS SESSEE. 14. IN APPEAL IT WAS SUBMITTED BEFORE THE COMMISSI ONER OF INCOME-TAX (APPEALS) THAT ASSESSEE ATTENDED CONFERE NCES CONDUCTED ABROAD WHICH WAS RELATED TO UPDATING OF P ROFESSIONAL KNOWLEDGE OF THE ASSESSEE. DURING THIS YEAR ASSESS EE VISITED GREEN LANE HOSPITAL PRESENTLY KNOWN AS AUCKLAND HOSPITAL IN NEW ZEALAND AND HE WAS AN OBSERVER TO PEDIATRIC CARDIAC SURGERY DEPARTMENT. IT WAS SUBMITTED THAT THE ASSESSING OFFICER DID NOT DO UBT THE INCURRENCE OF THESE EXPENSES AND THE SAME WERE INC URRED IN THE COURSE OF PROFESSION AND ALLOWABLE UNDER SECTION 37 (1) OF THE ACT. RELIANCE WAS PLACED ON THE FOLLOWING JUDGMENTS: (A) ACIT V DR ARWIND MATHUR 95 TTJ 975 (JODH) (B) CIT V DR M.S. SHROFF & CO 80 ITR 687 (DEL) (C) DR P. VADAMALAYAM V CIT 40 ITR 501 (MAD.) 15. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESS EE THE COMMISSIONER OF INCOME-TAX (APPEALS) CONFIRMED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER BY HOLDING AS UNDER: I HAVE GONE THROUGH THE FACTS OF THE CASE FROM THE ASSESSMENT ORDER. THE DEFECTS NOTICED BY THE AO IN RESPECT OF THE CLA IM OF FOREIGN TRAVELING EXPENSES STILL REMAINED UNEXPLAINED DURING THE APPE LLATE PROCEEDINGS. THE DECISIONS QUOTED BY THE AUTHORIZED REPRESENTATI VE RELATE TO ALLOWABILITY OF FOREIGN TRAVEL BY DOCTORS ON PROFES SIONAL TOURS OR ATTENDING INTERNATIONAL CONFERENCES OR SEMINARS ON MEDICAL SC IENCE ETC. HOWEVER HERE THE ASSESSEE HAS NOT BEEN ABLE TO PRODUCE ANY EVIDENCE REGARDING THE PURPOSE AND NATURE OF SUCH FOREIGN TRAVELLING E XPENSES. DURING THE APPELLATE PROCEEDINGS ALSO COPY OF THE CERTIFICATE REGARDING CONFERENCE IN GERMANY IS PRODUCED BUT AS MENTIONED IN THE ASSE SSMENT ORDER IT IS NEITHER SIGNED OR THERE IS NO SEAL AND STAMP OF THE ISSUING AUTHORITY OR INSTITUTE FOR THE SO CALLED ATTENDANCE CERTIFICATE. FOR TOUR TO NEW ZEALAND A COPY OF E-MAIL FROM DR GEETA SANGAMNERKAR ANAEST HETIST IN NEW ZEALAND IS PRODUCED CONFIRMING THAT HE HAD VISITED NEW ZEALAND AND STAYED THERE FOR ATTENDING OPERATIVE SESSIONS IN CA RDIAC SURGERY. THIS E- MAIL DATED 18.5.2006. FURTHER XEROX COPY OF PHOTO IDENTITY CARD ISSUED BY AUCKLAND HOSPITAL NEW ZEALAND IS ALSO PRODUCED DURING APPELLATE PROCEEDINGS. NO PROPER EVIDENCES HAVE BEEN PRODUCED IN RESPECT OF PURPOSE OF SUCH EXPENDITURE. THE EXPENDITURE FOR NE W ZEALAND IS NOT ITA NO 213/PN/09 DR AN VAY V MULAY PUNE 11 INCURRED FOR ANY MEDICAL SEMINAR OR CONFERENCE. AN E-MAIL FROM AN ANESTHETIST IN NEW ZEALAND DATED 18.5.2006 I.E. SEN T DURING THE APPELLATE PROCEEDINGS CANNOT BE TREATED AS AN EVIDENCE REGARD ING THE PURPOSE AND GENUINENESS OF THE EXPENDITURE. IN VIEW OF THE ABOV E THE EXPENDITURE HAS BEEN RIGHTLY DISALLOWED BY THE A.O AND THIS GRO UND OF APPEAL IS ALSO DISMISSED. NOT SATISFIED WITH THE ABOVE ORDER OF THE COMMISSI ONER OF INCOME-TAX (APPEALS) THE ASSESSEE IS IN APPEAL BEF ORE US. 16. BEFORE US THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE ATTENDED THE OPERATIVE SESSION IN CARDIAC SURGERY AT GREEN LANE HOSPITAL ALSO CALLED AS AUCKLAND CIT Y HOSPITAL AT AUCKLAND NEW ZEALAND FOR A PERIOD OF 15 DAYS DURIN G WHICH PERIOD HE WAS STAYING WITH DR GEETA SANGAMNERKAR WORKING A S ANTITHEISTS IN NEW ZEALAND. THE ASSESSEE WAS INVITED TO THE HOS PITAL BY DR KIRSTEN FINUCNE. IN GERMANY ASSESSEE PARTICIPATED IN THE CONFERENCE AND DISCUSSED THE PIONEERING TECHNIQUES IN CARDIAC SURGERY. THE ASSESSEE WAS PROVIDED WITH AN ACCESS C ARD BY THE ORGANIZER. THE CONFERENCE HAS BENEFITED THE ASSESSE E IN INTERACTING WITH THE OTHER EXPERTS IN THE SAME PROFESSION AND U PDATING HIS OWN KNOWLEDGE AND EXPERIENCE. THEREFORE HAVING PROVED THE INCURRENCE OF THE IMPUGNED EXPENDITURE FOR THE PURPOSE OF ASSE SSEES PROFESSION IT WAS SUBMITTED THAT THE CLAIM WAS ALL OWABLE UNDER SECTION 37(1) OF THE ACT. RELIANCE WAS PLACED ON TH E FOLLOWING JUDGMENTS: (A) ACIT V DR ARWIND MATHUR 95 TTJ 975 (JODH) (B) CIT V DR M.S. SHROFF & CO 80 ITR 687 (DEL) (C) DR P. VADAMALAYAM V CIT 40 ITR 501 (MAD.) 17. THE LEARNED DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND SUBMITTED THAT NO INTERFERENCE IS CALLED FOR IN THE ORDERS OF THE LOWER AUTHORITIES AND THEREFORE THE DISALLOWANCE MAY BE CONFIRMED. 18. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFU LLY. WE FIND SUBSTANCE IN THE CONTENTIONS OF THE ASSESSEE. THE A SSESSEE IS A CARDIAC SURGEON AND HE HAD UNDERTAKEN THE FOREIGN T OUR TO ITA NO 213/PN/09 DR AN VAY V MULAY PUNE 12 PARTICIPATE IN SEMINAR AND CONFERENCE IN NEW ZEALAN D AND GERMANY. THE JODHPUR BENCH OF THE TRIBUNAL IN THE CASE OF DR ARVIND MATHUR (SUPRA) HAS HELD THAT EXPENDITURE ON FOREIGN TOUR I NCURRED BY ASSESSEE DOCTOR FOR ATTENDING SEMINAR ON MEDICAL SC IENCES WAS ALLOWABLE AS DEDUCTION. THE HONBLE MADRAS HIGH CO URT IN THE CASE OF DR P. VADAMALAYAN (SUPRA) HAS HELD EXPENDITURE I NCURRED BY A LEADING SURGEON FOR VISITING VARIOUS HOSPITALS IN F OREIGN COUNTRIES TO STUDY LATEST TECHNIQUES IN SURGERY AND TREATMENT W AS ALLOWABLE AS A BUSINESS EXPENDITURE. KEEPING IN VIEW THE ABOVE JUD ICIAL PRONOUNCEMENTS AND THE RELEVANT FACTS OF THE PRESEN T CASE WE ARE OF THE OPINION THAT THE CLAIM OF THE ASSESSEE DESER VES TO BE ALLOWED. WE ACCORDINGLY SET ASIDE THE ORDER OF THE COMMISS IONER OF INCOME- TAX (APPEALS) ON THIS ASPECT AND DIRECT THE ASSESSI NG OFFICER TO DELETE THE DISALLOWANCE OF RS 1 68 273/-. IN THE RE SULT ASSESSEE SUCCEEDS ON THIS GROUND OF APPEAL. 19. RESULTANTLY APPEAL OF THE ASSESSEE IS PARTLY A LLOWED AS ABOVE. PRONOUNCED IN THE OPEN COURT ON THIS 11TH D AY OF FEBRUARY 2011. SD/- SD/- (I C SUDHIR) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 11 TH FEBRUARY 2011 1) DR ANVAY V MULAY PUNE 2) THE ITO WD 5(3) PUNE 3) THE CIT (A)-II PUNE 4) THE CIT-III PUNE 5) THE D R B BENCH I.T.A.T. PUNE. BY ORDER TRUE COPY ASST. REGISTRAR I.T.A.T. PUNE B ITA NO 213/PN/09 DR AN VAY V MULAY PUNE 13