51.The assessed dependent brother has to undergo bypass surgery and was hospitalized. The assessee has paid Rs.65,000 for his treatment. The assesse claimed deduction under section 80DDB towards the medical treatment expenses. The assessing officer disallowed.  his claim and added the medical expenses to his income and levied tax. Defend your client!

1. Facts of the Case

• The assessee, an individual taxpayer, has a dependent brother who had to undergo bypass surgery.
• The brother was hospitalized, and the assessee incurred medical expenses amounting to ₹65,000 for his treatment.
• The assessee claimed deduction under Section 80DDB of the Income Tax Act, 1961 for this amount.
• The Assessing Officer (AO) disallowed the claim, added the amount to the assessee’s total income, and levied tax accordingly.
• The assessee seeks to challenge this disallowance and defend his claim legally.

2. Issues in the Case [Questions]

1. Does bypass surgery fall under the category of specified diseases or ailments eligible under Section 80DDB?
2. Is a dependent brother considered a qualifying dependent relative under Section 80DDB for availing deduction?
3. Can the assessing officer legally disallow the deduction despite actual expenditure and dependency being proven?

3. Legal Principles Covered

A. Section 80DDB of the Income Tax Act, 1961

• Allows deduction for medical treatment of specified diseases or ailments for:
  • Self, or
  • Dependent relatives (in case of individuals).
• Eligible dependents include: “Spouse, children, parents, brothers, and sisters of the individual who are wholly or mainly dependent on such individual and not having income exceeding the minimum exemption limit.”
• The maximum deduction allowed (at the time depending on the AY) was ₹40,000 (general) and ₹60,000 for senior citizens (amounts revised in subsequent years).

B. Rule 11DD of the Income Tax Rules

• Lists specified diseases for which deduction under 80DDB is allowed, such as:
  • Neurological diseases
  • Cancer
  • AIDS
  • Chronic renal failure
  • Hematological disorders
• Cardiac diseases including bypass surgery are not included in this list as per Rule 11DD.

C. Judicial Precedents & CBDT Guidance

• Several tribunals and courts (e.g., ITAT Delhi, CIT v. V.K. Kapoor) have held that deductions under 80DDB are strictly limited to prescribed ailments only.
• CBDT Circulars clarify that diseases outside the Rule 11DD list do not qualify for deductions under Section 80DDB.

4. Possible Judgement

As counsel for the assessee, we present the following defense:

• The dependent brother clearly qualifies as a dependent relative under Section 80DDB.
• However, the ailment – bypass surgery or coronary artery disease is not currently covered under the specified diseases listed in Rule 11DD.
• Therefore, while the intention and actual expense are genuine, the deduction under Section 80DDB cannot be allowed due to lack of legal coverage.

Important Note: If the brother was a senior citizen, the assessee may explore Section 80D, which allows a deduction up to ₹50,000 for medical expenses incurred for a senior citizen, even if not covered under insurance. This could be a valid alternate claim route.