9. The assesse’s dependent brother has to undergo bypass surgery and was hospitalized. The assesse has paid Rs.65,000 for his treatment. The assesse claimed deduction under section $0DDB towards the medical treatment expenses. The assessing officer disallowed his claim and added the medical expenses to his income and levied Defend your client?

1. Facts of the Case

• The assessee’s dependent brother underwent bypass surgery and was hospitalized for medical treatment.
• The assessee incurred an expense of Rs. 65,000 towards the medical treatment.
• The assessee claimed a deduction of this amount under Section 80DDB of the Income Tax Act, 1961.
• However, the Assessing Officer (AO) disallowed the deduction and added the amount to the total income of the assessee, leading to a higher tax liability and possibly penalties.
• The assessee seeks to defend the deduction claim and justify its validity under the law.

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2. Issues in the Case

1. Whether expenses incurred by the assessee for the treatment of his dependent brother qualify for deduction under Section 80DDB?
2. Is bypass surgery covered under the specified diseases or ailments under Rule 11DD of the Income Tax Rules?
3. What constitutes a “dependent” under Section 80DDB?
4. Was proper documentation or medical certification provided to support the claim?
5. Was the disallowance by the AO legally tenable or arbitrary?

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3. Legal Principles Covered to Support Case Proceedings and Judgements

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

• Section 80DDB allows a deduction for medical treatment expenses incurred on:
  • The assessee, or
  • A dependent family member, for the treatment of specified diseases.
• Dependent includes:
  • Spouse
  • Children
  • Parents
  • Siblings (brother/sister) who are wholly or mainly dependent on the assessee and do not have independent income exceeding the basic exemption limit.

B. Specified Diseases under Rule 11DD

• The diseases specified include:
  • Neurological diseases (e.g., dementia, Parkinson’s)
  • Cancer
  • AIDS
  • Chronic renal failure
  • Hematological disorders
  • Cardiovascular diseases requiring surgical treatment (such as coronary artery bypass surgery)

Therefore, bypass surgery is a qualifying condition under Section 80DDB.

C. Documentation Requirements

• A prescription or certificate from a specialist doctor working in a government hospital is generally required, certifying the disease and treatment.
• If such certificate was submitted, the AO cannot arbitrarily disallow the claim.

D. Judicial Precedents and Interpretation

• Courts have held that interpretation of beneficial provisions (such as deductions for medical treatment) must be liberally construed in favor of the taxpayer, especially in genuine cases of hardship and health expenditure.

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4. Possible Judgement

Defense of the Assessee

• The assessee’s dependent brother underwent cardiac bypass surgery, which qualifies as a specified disease under Rule 11DD.
• The brother is dependent on the assessee and does not have income above the threshold limit—hence covered under the term “dependent” under Section 80DDB.
• The assessee incurred genuine medical expenses amounting to Rs. 65,000, and provided proof of treatment and payment.
• If a medical certificate from a specialist in a government hospital was furnished (or can be furnished), the disallowance by the AO is unwarranted.