The Commissioner Of Income Tax, Central Ii, Mumbai v. Shri Karan Johar, Legal Heir Of Late Shri Yash B. Johar

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.4602 OF 2010 The Commissioner of Income Tax, Central II, Mumbai..Appellant. Versus Shri Karan Johar, legal heir of late Shri Yash B. Johar..Respondent. Mr.Vimal Gupta with Ms.Padma Divakar for the appellant.Mr.P.J. Pardiwala, Senior Advocate with Mr.Atul K. Jasani for the respondent. CORAM : J.P. Devadhar &K.K. Tated, JJ. P.C. : DATE : 28[th] September 2011 1.The question of law raised in this appeal reads thus : “Whether, on the facts and in the circumstances of the case, the medical expenditure incurred in USA on Cancer Treatment of Late Yash Johar, the proprietor of the business, is a business expenditure within the meaning of Section 37(1) of the Act or a personal expenditure ?” 2.The Income Tax Appellate Tribunal following the judgment of this Court in the case of Mehboob Productions Private Limited V/s. Commissioner of Income Tax reported in 106 ITR 758 allowed the claim of the assessee that the expenditure incurred on the treatment of the assessee is allowable under Section 37(1) of the Income Tax Act. Though the counsel for the Revenue sought to distinguish the judgment by contending that the assessee who was suffering from cancer ought not to have gone outside India, in the facts of the present case since the assessee is a producer of a film, and in fact the shooting activity was extensively carried out abroad and while carrying on the professional activity abroad, the assessee was required to incur the expenditure, the decision of the Income Tax Appellate Tribunal in holding that the expenditure incurred on medical treatment was allowable under Section 37(1) of the Income Tax Act, 1961 cannot be faulted. 3.Accordingly, the appeal is dismissed with no order as to costs. (K.K. Tated, J.) (J.P. Devadhar, J.)