A funny case law (income tax act)

Surendra lawyers have the tendency to stretch the law...if not for them, you wouldnt have any amendment in the income tax act!!!

The case was based on the argument that in past the courts have allowed similar expenditure in case of Mehboob production pvt ltd case...however, in Shanti Bhushan's case it was distinguished on the basis of facts!

Had Shanti Bhushan won the case, we would either be praising him for a landmark judgment or govt would have amended the act!

Ajit...very much..even the unborn child has rights over the property.  though it is contingent of him/her being born alive

Salmond in his Jurisprudence (1957 edition, at pages 350, 353 and 354) dvelved on this issue:

"There is nothing in law to prevent a man from owning property before he is born. His ownership is necessarily contingent indeed, for he may never be born at all but it is nonetheless a real and present ownership. A man may settle property upon his wife and children to be born of her or he may die intestate and his unborn child will inherit his estate.... A child in its mothers' womb is for many purposes regarded by a legal fiction as already born in accordance with the maxim naciturus pro jam nato habetur. In the words of Coke the law in many cases hath consideration of him in respect of the apparent expectation of his birth. Thus in the law of property there is a fiction that a child en ventre sa mere is a person in being for the purposes of (1) the acquisition of property by the child itself; or (2) being a life chosen to form part of the period in the rule against perpetuities. The rights of an unborn son whether proprietary or personal are all contingent on his birth as a living human being. The lega personality attributed to him by way of anticipation falls away ab initio if he never takes his place among the living; Abortion and child destruction are crimes but such acts do not amount to murder or manslaughter unless the child is born alive before he dies; a posthumous child may inherit, but if he dies in the womb or is still-born his inheritance fails to take effect and no one can claim through him though it would be otherwise if he lived for an hour after his birth."

Kartik trust me...had he won, all of us would have advised our clients to do so!!

as I stated above...similar expenditure has been allowed...the court only distinguished one case from another....the case created a lot of hue and cry because Prashant Bhushan was involved in IAC back then...

with regards to any case law, you wouldn't have asked the question had you read the case text that I posted earlier. please refer Mehboob Production Pvt. Ltd. Vs. Commissioner of Income-Tax 106 ITR 78.  The case was differentiated on the basis of facts and therefore, Shanti Bhushan lost the case.  Had he formed a law firm and then borne these expenses, it is very much possible that the same could have been allowed to him following Mehboob studio judgment.

with regards to neutral citizen, we have an act doesnt discriminate between legal income and illegal income.  From a neutral person's perspective, the whole of illegal income should be consficated but no, we just tax it at 30%.  So I don't think the tax law itself attempts to look things from neutral citizen's perspective. 

You know in one assessment, an income tax officer himself was caught taxing bribes...they just taxed it at 30%.  The bribe was paid by NDTV.  So I don't think tax department can take a moral high ground anywhere..

it is not necessary to have it included in plant and machinery..can be included in section 37!! lolz

Kartik bhai I know...the argument was that it cannot be treated as personal expenditure!! 

just consider it this way...if you are an employee and your employer pays for your medical expenses, then it is considered as business expense!

Hi All,

It is indeed a valid case in my view and should have been upheld. Income Tax Act should allow for such expenses.  Consider an example, A treatment of vocal chord related health issues for a lawyer should be part of business expenditure as arguing in court is part of professional activity wherein it strains the vocal chord unlike normal activity.  Same with heart ailment and treatment as they are under strain.

As how a plant undergoes depreciation, so do health and if under too much strain due to professional activity, then same should be allowed. (equivalent to double or triple shift dep. allowance in the case of P & M),

Hence in my view it is a fit case for reconsideration as well.

Regards

Bala

There is also a case in which it was claimed that as "advance tax" is not a tax, penalties and interest can not be charged on it.  It was struck down by the Highest Court.

Kabra Sir,

Please share the citation.  Would be useful.