GOLKUNDA COMMERCIAL PRIVATE LIMITED,DEWAS vs. ASSTT.COMMISSIONER OF INCOME TAX, UJJAIN

आदेश/ O R D E R

Per B.M. Biyani, A.M.:

Feeling aggrieved by the order of first appeal dated 16.09.2025 passed by the learned Commissioner of Income-Tax (Appeals), National Faceless Appeal Centre, Delhi ["Ld. CIT(A)"], which in turn arises out of the assessment order dated 10.09.2022 passed by the learned Assessment Unit of Income-tax Department ["Ld. AO"] u/s 143(3) r.w.s. 144B for Assessment Year ["AY"] 2020-21, the assessee has filed this appeal on the grounds as mentioned in Form No. 36 (Appeal Memo).

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Golkunda Commercial Pvt. Ltd. ITA No. 882/Ind/2025 – AY 2020-21 2. The background facts leading to present appeal are such that the

assessee is a private limited company deriving income from commission on

mutual funds, dividend and other sources. The assessee filed its return of

income for AY 2020-21 declaring a total income of Rs. 8,02,460/-. The case

was selected for scrutiny assessment on the issue of “Business expenses”.

The Ld. AO issued notices u/s 143(2)/142(1) and called for various details,

to which the assessee responded. On examination of the details furnished by

assessee, the Ld. AO noted that under the head "Employee Benefit

Expenses" of Rs. 57,38,357/-, a sum of Rs. 15,57,557/- had been claimed

as “Medical Expenses Reimbursement”. On further scrutiny, the AO found

that a reimbursement of Rs. 15,24,457/- made to “Shri Ravi Mohan” is

included therein. The assessee explained that the said payment of Rs.

15,24,457/- represented a partial reimbursement of the medical expenditure

incurred by “Shri Ravi Mohan”, a full-time employee and promotor-director

(holding 52.30% shares) of assessee-company, towards his critical heart

surgery at Bombay Hospital, Mumbai, a hospital recognised by the Central

Govt. for the purposes of Rule 3A(2)(d) of Income Tax Rules. The total

expenditure on the surgery was Rs. 48,38,200/-, of which the assessee-

company reimbursed Rs. 15,24,457/-, the mediclaim policy settled Rs.

4,72,700/-, and the balance of Rs. 28,41,043/- was borne personally by

“Shri Ravi Mohan”. The assessee submitted that the said payment was a

business expenditure for it, allowable as deduction in computing business

profit. However, the Ld. AO disallowed assessee’s claim on the ground that

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Golkunda Commercial Pvt. Ltd. ITA No. 882/Ind/2025 – AY 2020-21 the expenditure was personal in nature and for business of assessee.

Accordingly, the AO completed assessment u/s 143(3) at a total income of

Rs. 23,26,915/- after making disallowance of Rs. 15,24,457/-. Aggrieved,

the assessee preferred an appeal before Ld. CIT(A) but did not get any

success. Now, the assessee has come in next appeal before us.

whether the disallowance of Rs. 15,24,457/- representing partial

reimbursement of medical expenditure paid by assessee-company for

medical treatment of “Shri Ravi Mohan”, its promotor-director and full-time

employee, is sustainable?

(i) That “Shri Ravi Mohan” was a full-time employee and promotor-

director of assessee-company, possessing a Bachelor's Degree in

Mechanical Engineering from Jabalpur University and a Master's

Degree in Industrial Engineering from Kansas State University, USA,

in 1970.

(ii) That, on account of country-wide reputation of “Shri Ravi Mohan” in

the Industrial World and his expertise in mutual fund dealings, the

assessee-company was recognised as a distributor/franchisee by

various mutual funds. Ld. AR carried us to Page 1 of Paper-Book

where a list of 13 mutual funds from which the assessee-company

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Golkunda Commercial Pvt. Ltd. ITA No. 882/Ind/2025 – AY 2020-21 derived commission during the year, is placed. The business of

company was set up and progressed because of devoted services,

expertise, relations and linkages of “Shri Ravi Mohan”. Ld. AR

submitted that “Shri Ravi Mohan” is the driving force of assessee-

company.

(iii) That, during the year, there was a critical heart surgery of “Shri Ravi

Mohan” on which total medical expenditure of Rs. 48,38,200/- was

incurred. Against this huge expenditure, the assessee-company

reimbursed only Rs. 15,24,457/-, representing less than 30% of the

total cost; the balance of Rs. 28,41,043/- (after a reimbursement of

just Rs. 4,72,700/- from insurance company) was borne personally by

Shri Ravi Mohan, who was drawing a salary of only Rs. 1.5 lakh per

month from assessee-company and had no other source except salary

income.

(iv) That, the surgery was performed on 08.11.2019 at Bombay Hospital,

Mumbai, an approved hospital under Rule 3A(2)(d) of the Income Tax

Rules, covering critical heart surgery as a prescribed ailment.

(v) That, after successful heart surgery, the Board of Directors passed a

resolution in their meeting dated 16.12.2019, copy of resolution is

filed at Page No. 2 of Paper-Book and our attention is drawn to same.

According to resolution, the management approved to make payment

of Rs. 15,00,000/- towards expenditure on medical treatment.

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Golkunda Commercial Pvt. Ltd. ITA No. 882/Ind/2025 – AY 2020-21 (vi) That, the reimbursement made by assessee-company was debited to

P&L A/c under the head “Employee Benefit Expenses” alongwith other

components of employee payments, like Salary, HRA, LTA, Ex-gratia,

etc. aggregating to Rs. 57,38,357/-. Ld. AR submitted that the said

reimbursement is very much allowable as a business expenditure u/s

37(1) in the same manner as other components like Salary, HRA, LTA,

Ex-gratia, etc. paid or reimbursed to employees, which stand allowed

by Ld. AO.

(vii) That, the section 37(1) allows any expenditure incurred by an

assessee wholly and exclusively for the purpose of business. That

“Shri Ravi Mohan” was a key person of assessee-company managing

the line of business carried on by it and it is Shri Ravi Mohan’s

expertise and engagement because of which the assessee-company

was able to get business. To support this claim, Ld. AR referred year-

wise revenue data of assessee-company, as under:

Assessment Year Gross Receipts Net Profit before tax 2019-20 Rs.93,15,227/- Rs.20,48,825/- 2020-21 (year under consideration) Rs.84,11,031/- Rs.2,29,082/- 2021-22 Rs.89,30,505/- Rs.24,51,117/- 2022-23 Rs.1,57,07,475/- Rs.97,21,017/- 2023-24 Rs.1,30,12,678/- Rs.69,94,981/- 2024-25 Rs.1,54,07,696/- Rs.93,56,443/- 2025-26 Rs.3,16,79,814/- Rs.2,43,66,293/-

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Golkunda Commercial Pvt. Ltd. ITA No. 882/Ind/2025 – AY 2020-21

Referring to above figures, Ld. AR submitted that in current AY 2020-

21, the gross receipts and net profit have come down as compared to

the immediate preceding AY 2019-20. Further, after heart surgery, the

gross receipts and net profit have registered substantial increase in

subsequent AY 2021-22 onwards. Thus, the revenue figures of

assessee-company themselves speak the phenomenal contribution of

“Shri Ravi Mohan”.

and narrated that the present case of assessee is directly covered by these

decisions:

Hon’ble Jurisdictional High Court of Madhya Pradesh (i) in

Commissioner of Income-tax Vs. Steel Ingots (P) Ltd. (1996) 220 ITR

552:

“9. On perusal of the record, it is found that the board of directors of the assessee/company passed a resolution on 12-4-1980 authorising foreign tour and medical expenses on Mr. Agrawal for his treatment in USA as well as Mrs. Agrawal to accompany him on the ground that as Shri Agrawal who was financial director of the company, his services were absolutely necessary for the purposes of assessee's business. Since Mr. Agrawal was suffering from heart trouble, he could not go by himself and therefore, his wife had to accompany him and for this purpose, foreign exchange was sanctioned by the Reserve Bank of India for both Mr. & Mrs. Agrawal. A copy of the same was filed by the assessee before the Tribunal. In the circumstances, the Tribunal held that the expenses incurred on the tour of Mr. Agrawal in USA to which Mrs. Agrawal accompanied him, was clearly on the principle of commercial expediency, as he had been rendering valuable services to the assessee/company.

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Golkunda Commercial Pvt. Ltd. ITA No. 882/Ind/2025 – AY 2020-21 10. On similar facts and circumstances of the case, in Mehboob Productions (P.) Ltd. v. CIT [1977] 106 ITR 758, the Bombay High Court held as under: ". . . In view of the facts and conclusions arrived at by the Tribunal regarding the basis on which the resolution was passed by the company, the entire amount of medical expenses occasioned by M's illness which were borne by the assessee-company pursuant to the resolution, should be allowed as a deduction on the footing that the decision to reimburse was taken on the principle of commercial expediency and that no part of such expenses was held to be not proved or arbitrarily, excessive or unreasonable." (p. 760) 11. The importance of services being rendered by the Financial Director, Shri R.R. Agrawal can be appreciated in the backdrop of the position that other directors, namely, Shri K.S. Trivedi, Shri V.P. Gupta and Shri Airen and the wives of Shri Trivedi and Shri Gupta toured USA to look after the proper medical treatment of Shri R.R. Agrawal. It is different matter that the assessee before the Tribunal did not press any claim regarding allowance of foreign tour expenses with regard to the aforesaid directors and their wives and restricted the claim only to the tour expenses concerning Shri R.R. Agrawal and his wife. We noticed that there was no necessity of medical treatment of Shri R.R. Agrawal in USA. Such advice was tendered by eminent doctors like Dr. K.G. Nair, heart specialist of Bombay and Dr. R.S. Mehta, a renowned physician and cardiologist. Shri Agrawal has proceeded to USA for a by-pass heart surgery. The assessee/company failed to say that the services of Shri Agrawal, acting as Financial Director were absolutely necessary for the purposes of the assessee's business, as such, passed the resolution. Section 37 of the Act provides that any expenditure (not being expenditure of the nature described in sections 30 to 36 and not being in the nature of capital expenditure or personal expenses of the assessee) laid out or expended wholly and exclusively for the purposes of the business or profession shall be allowed in computing the income chargeable under the head "Profits and gains of business or profession". The expenditure is linked with the business of the assessee. The revenue placed no material on record to destroy the worth of the resolution passed by the assessee. At bottom, every case turns of its own fact. In the instant case, there is enough material on record to show the commercial expediency if the assessee thought it fit to provide best medical treatment to its financial director so that he remains fit to manage the affairs of the company. It cannot be said that the expenses so incurred were inconnectible with the purpose of the business. That being so, the Tribunal does not seem to have any error. 12. Considering the facts in the case on hand, it emerged that by resolution dated 12-4-1980, the board of directors of the assessee/company, authorised the foreign tour and medical expenses of Mr. Agrawal for his treatment in USA as well as Mrs. Agrawal for accompanying him, on the

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Golkunda Commercial Pvt. Ltd. ITA No. 882/Ind/2025 – AY 2020-21 principle of commercial expediency. It is not the case of the department that the expenses as incurred on the travel of Mrs. & Mr. Agrawal and Medical expenses on Mr. Agrawal was arbitrary, excessive or unreasonable, thereafter, the order passed by the Tribunal allowing the actual expenses incurred on Mr. & Mrs. Agrawal, as deductible for the assessment of the Income Tax, does not suffer from any infirmity. 13. We, accordingly, answer the question referred to us for our opinion, in the affirmative, i.e., in favour of the non-applicant/assessee and against the department.” (ii) Hon’ble Bombay High Court in Mehboob Productions Private Limited

Vs. Commissioner of Income-tax (1977) 106 ITR 758 (BOM):

“10. I propose to deal first with the second question referred to us, which question pertains to the disallowance of 1/3rd of the expenses for the medical treatment of Mehboob Khan in the U.S.A. This is because question is not capable of any elaborate discussion as seems to be required for answering the first question. The findings of the Tribunal pertaining to this claim have already been indicated earlier. According to the Tribunal Mehboob Khan's visit to the U.S.A. was for the purpose of the company's business, and it was noted that his air-fare to that country had been allowed as expenditure incurred by the assessee on that footing. Further, it was observed that whilst there was no agreement regarding such medical expenses, absence of such agreement was not conclusion of the matter inasmuch as it was a special contingency which would not normally arise and, therefore, would not be required to be provided for. It was observed by the Tribunal that this was not the ordinary medical treatment, nor was it a case where the director had taken advantage of his visit to the U.S.A. for a medical check-up. The seriousness of the heart attack was also accepted by the Tribunal, which also proceeded on the footing that Mehboob Khan was the driving force behind the assessee-company. Accordingly, the Tribunal seems to have accepted that it was on the principle of commercial expediency that the assessee-company decided to reimburse these expenses to the concerned director. In para. 8 of the order the Tribunal has referred to the contentions of the department itself which are to the effect that Mehboob Khan was the driving force of the company and that there was nothing unbusinesslike or abnormal in the company bearing the expenses of medical treatment of a person who meant so much to the company. Now, the question which we have to consider is whether with these findings there was any justification for disallowing 1/3rd of the expenses of the director on the footing or on the basis that the Tribunal has chosen to adopt. In my opinion, once having accepted that it was on the principle of commercial expediency that the company had resolved to reimburse such expenses to the director who was admittedly the driving force of the company, it would not be open to the Tribunal to disallow a portion of such expenses on the footing that it has done. It must be noted in connection with this point that it was not the

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Golkunda Commercial Pvt. Ltd. ITA No. 882/Ind/2025 – AY 2020-21 revenue's case that any part of the expenses claimed was not satisfactory proved or that the 1/3rd which was disallowed was such amount found to be excessive or unreasonably incurred. We must proceed upon the footing that the entire amount which had been agreed to be reimbursed represented the expenses which in fact had been incurred by the director, that the amount claimed was duty proved and that no part of such expenses could be regarded as excessive or unreasonable. With these factual findings, can the resolution of the board of directors of the company dated 1st May, 1958 (annexure "E" to the statement of case), resolving to bear the entire expenses on the medical treatment be said to be in any way improper or against the principle of commercial expediency? It is important to point out that it has not been the revenue's case that the Tribunal's conclusion to the effect that such decision of the board of directors of the company was based on the principle of commercial expediency is in any way improper or perverse. Now, if the decision by the assessee to bear these medical expenses of its director is held justifiable and sustainable on the principle of commercial expediency, I do not see any basis for disallowing 1/3rd of these expenses on the footing that the Tribunal has adopted. Either the entire medical expenses have to be properly reimbursed on the principle of commercial expediency or no part of such reimbursed expenses is allowable to the assessee-company. 11. In the question as posed, the Tribunal has referred to section 10(4A) of the Act which was the basis on which the Income-tax Officer and the Appellate Assistant Commissioner had rejected the assessee's claim that these expenses be allowed as a deduction. Under the relevant statutory provisions, nothing in sub-section (2) of section 10 of the Act shall be deemed to authorise the making of any allowance in respect of any expenditure which result directly or indirectly in the provision of any remuneration or benefit or amenity to a director or a person who has substantial interest in the company within the meaning of sub-clause (iii) of clause (6C) of section 2 of the Act. Now, in the first place, the question arise whether such reimbursement could be regarded as remuneration or benefit or amenity provided by the assessee-company to its director. In any case, it would not be possible to sustain the disallowance of 1/3rd of such expenses on the footing that this would fall within the mischief of section 10(4A) of the Act, whilst the balance 2/3rd expenses, in respect of which the assessee's claim has been upheld by the Tribunal, would not be so governed. As indicated earlier, the proper view to be taken would seem to be that in view of the facts and conclusion arrived at by the Tribunal regarding the basis on which the resolution (annexure "E" to the statement of case) was passed by the assessee-company, the entire amount of medical expenses occasioned by Mehboob Khan's illness which were borne by the assessee-company pursuant to this resolution, is liable to be allowed on the footing that the decision to reimburse was taken on the principle of commercial expediency and that no part of such expenses was held to be not proved or arbitrarily excessive or unreasonable.”

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Golkunda Commercial Pvt. Ltd. ITA No. 882/Ind/2025 – AY 2020-21 (iii) ITAT, Ahmedabad in M/s Roomag Motors & Controls (P) Ltd. Vs. Dy.

CIT, ITA No. 796/Ahd/2025, order dated 09.09.2025:

“6.3 Issue No. 3 - Disallowance of Medical Expenses of Director (Rs.1,00,901/-) - Ground No. 4 6.3.1 The assessee claimed an amount of Rs.1,00,901/- as business expenditure towards reimbursement of medical expenses of one of its directors. The Assessing Officer held that such expenditure was personal in nature and not incurred wholly and exclusively for the purpose of business. Invoking section 37(1), the AO disallowed the claim. 6.3.2 Before the CIT(A), the assessee submitted that the Directors are employees of the company, and reimbursement of medical expenses constitutes part of their remuneration, which is contractually authorizing. It was also submitted that the Board of Directors had passed a resolution (Pg. 175 of PB-2) authorizing such reimbursement. IT was further submitted that the expenditure was incurred on grounds of commercial expediency since the director was a key managerial person and a driving force behind the company's business. It was argued that a company, being a juristic person, cannot incur "personal expenses"; therefore, disallowance on that ground was misconceived. Reliance was placed on several judicial precedents before CIT(A). 6.3.3 The learned CIT(A), however, concurred with the AO's findings, holding that personal medical expenses of directors do not fall within the ambit of section 37(1) unless covered under a contractual or statutory obligation. 6.3.4 The learned AR reiterated the submissions before the CIT(A) and also placed reliance on decision of Co-ordinate Bench in case of Dy. CIT v. Paradeep Oxygen (P.) Ltd. [2001] 71 TTJ 662 (Cuttack), wherein the Co-ordinate Bench held that reimbursement of medical expenses to the managing director, duly authorized by a bona fide Board Resolution, is allowable u/s 37(1) as expenditure wholly and exclusively for business purposes. 6.3.5 We have carefully considered the rival submissions, perused the orders of the authorities below, and examined the material placed on record including the Board Resolution dated 12.04.2011 (Pg. 175 of PB-2). On consideration, we note that the assessee has indeed placed on record the copy of the Board Resolution dated 12.04.2011, authorized reimbursement of actual medical expenses incurred by directors. The company, being a juristic person, cannot have personal needs of its own, and once the expenditure is incurred pursuant to a valid resolution of the Board and in discharge of contractual obligation, the same partakes the character of business expenditure. The Cord0nate Bench in Paradeep Oxygen (P) Ltd. (supra) has also held that reimbursement of medical expenses of a managing director, when duly authorized by Board resolution, is allowable u/s 37(1) as expenditure incurred wholly and exclusively for business purposes.

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Golkunda Commercial Pvt. Ltd. ITA No. 882/Ind/2025 – AY 2020-21 6.3.6 In light of these binding precedents and the factual position of authorisation by the Board Resolution, we are of the considered view that the disallowance sustained by the authorities below is not justified. We, accordingly, direct deletion of the addition of Rs. 1,00,901/-. This ground of appeal is allowed.”

and delete the disallowance made by lower-authorities.

(i) That the heart surgery was done on 08.11.2019 and the Board

resolution dated 16.12.2019 is post-surgery. Therefore, it is a case of

after-thought reimbursement of expenditure by assessee.

(ii) Without prejudice to above, the resolution has approved Rs.

15,00,000/- only whereas the assessee-company has paid Rs.

15,24,457/-. This is against the resolution passed by Board of

Directors itself.

(iii) That the P&L A/c filed by assessee shows that in the immediate

preceding year, the expenditure on medical treatment was just Rs.

33,100/- whereas in current-year, the expenditure is abruptly as high

as Rs. 15,57,557/- (including the reimburement of Rs. 15,24,457/-

made to Shri Ravi Mohan). Therefore, it appears that the assessee-

company has given undue benefit to Shri Ravi Mohan who happens to

be a shareholder holding 52.30% shares in company.

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Golkunda Commercial Pvt. Ltd. ITA No. 882/Ind/2025 – AY 2020-21 (iv) That the medical treatment of an individual, who is a shareholder or

director of company, is inherently personal in nature and cannot be

regarded as expenditure incurred wholly and exclusively for the

purposes of business u/s 37(1).

(v) That Shri Ravi Mohan was already drawing a salary of Rs. 1.5 lakh

per month in addition to ex-gratia, and that notwithstanding his

alleged indispensability, the commission income of the company had

in fact decreased by approximately Rs. 9 lakh during the year under

consideration as compared to the preceding year, negating any direct

nexus between the reimbursement and enhancement of business

income.

(vi) A strong reliance is placed on the findings recorded by Ld. AO and Ld.

CIT(A).

made/upheld by lower-authorities.

(i) Shri Ravi Mohan promoted this company and that is why he is holder

of 52.30% shares since beginning but his shareholding is not a

relevant point at all. “Shri Ravi Mohan” is an employee/advisor of

assessee-company; giving his full time and working to the assessee-

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Golkunda Commercial Pvt. Ltd. ITA No. 882/Ind/2025 – AY 2020-21 company and receiving salary of Rs. 1,50,000/- per month from

assessee-company. There is no other source of income for him.

(ii) The expenditure incurred for welfare or benefit of an employee is

certainly for the purpose of business of employer; it cannot be

construed as “personal” expenditure for employer. This is more so in

present case where the assessee is a company. The expression

“personal” expenditure occurring in section 37(1) has to be examined

qua the persona/personality of “assessee”. It is a settled judicial view

that a company is an “inanimate entity” and there cannot be any

“personal” expenditure in the case of company.

(iii) The resolution is passed as and when the statutory meeting of

directors is held after taking into account the outcome of heart

surgery, hence it was a prudent action on the part of company.

(iv) The amount of Rs. 15,00,000/- sanctioned in the resolution was a

lump sum but, however, actual reimbursement made is Rs.

15,24,457/-. The difference is marginal and not substantial.

(v) The issue of allowability of medical treatment expenditure of director/

employee is directed settled in favour of assessee by various decisions

quoted by him including the binding decision of Hon’ble Jurisdictional

High Court itself.

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Golkunda Commercial Pvt. Ltd. ITA No. 882/Ind/2025 – AY 2020-21 10. We have heard rival submissions of both sides and perused the

material on record including the orders of lower authorities. The issue before

us is whether the reimbursement of medical expenditure of Rs. 15,24,457/-

by assessee-company to its promotor-director and full-time key employee,

Shri Ravi Mohan, for critical heart surgery, can be allowed as a business

expenditure u/s 37(1) of the Act?

(i) The Ld. DR has contended that the Board Resolution dated

16.12.2019 is post-surgery and thus an after-thought. We do not find

any merit in this contention. The Ld. AR has submitted that the

resolution is passed as and when the statutory meeting of directors is

held. Further, the directors, while passing resolution, took into

account the success of surgery and only therefore resolved to make

reimbursement, which is a prudent action and no fault can be

attributed in such action.

(ii) The resolution sanctioned Rs. 15,00,000/- whereas actual

reimbursement was Rs. 15,24,457/-. We notice that the marginal

excess of Rs. 24,457/- is de minimis, being less than 0.05% of total

expenditure on surgery. It is not a case of revenue that the difference

of Rs. 24,457/- was reimbursed without incurring any expenditure,

giving monetary benefit to the pocket of “Shri Ravi Mohan”. Therefore,

we decline to sustain disallowance on this ground.

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Golkunda Commercial Pvt. Ltd. ITA No. 882/Ind/2025 – AY 2020-21 (iii) In so far as the objection of ‘personal’ expenditure is concerned, we

find that this objection stands conclusively answered by settled

judicial precedents. Firstly, any expenditure made by an employer for

the welfare or benefit of its employee including medical

reimbursement, is a business expenditure and cannot be

characterised as "personal" expenditure to the employer. Secondly, a

company is an artificial person and, by its very nature, cannot incur

"personal expenses" within the meaning of section 37(1). The

expression "personal expenses of the assessee" in section 37(1) must

be read qua the assessee's own persona and the assessee herein is a

corporate entity incapable of having personal exigencies. This

proposition is well accepted in numerous cases.

(iv) The Ld. DR has pointed out a decrease of approximately Rs. 9 lakh in

commission income during AY 2020-21 to negate nexus between

reimbursement and business. We are unable to accept this contention.

A key employee's incapacitation on account of critical heart surgery

would naturally and foreseeably affect business revenues in current

year. In fact, as demonstrated by Ld. AR, the revenue and profit

during pre-surgery and post-surgery were higher and it is only during

the year of surgery (i.e. current year) that the volume of business and

profit declined. This manifests assessee’s claim that due to heart

surgery of director in current year, the business turnover could not be

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Golkunda Commercial Pvt. Ltd. ITA No. 882/Ind/2025 – AY 2020-21 achieved. This in turn shows that the presence and participation of

“Shri Ravi Mohan” is very instrumental to the business of assessee.

clear case for allowance:

(i) Shri Ravi Mohan is a full-time employee in receipt of salary of Rs.

1,50,000/- per month and is the driving force behind the assessee-

company's entire line of business by virtue of his distinguished

academic qualifications, expertise and reputation. The assessee-

company's empanelment with 13 mutual funds as a recognised

distributor/franchisee is attributable to his expertise and

relationships;

(ii) The surgery was a critical cardiac procedure performed at Bombay

Hospital, Mumbai, a hospital recognised by the Central Government

under Rule 3A(2)(d) of the Income Tax Rules, for a prescribed ailment;

(iii) The assessee reimbursed only Rs. 15,24,457/- against a total surgical

cost of Rs. 48,38,200/-, i.e., less than 32% of total expenditure; the

substantial balance was borne personally by Shri Ravi Mohan from

his modest salary income, this negates any inference of undue benefit;

(iv) The reimbursement was authorised by a Board Resolution, duly

passed in a formal meeting, and was debited to the P&L A/c under the

legitimate head of "Employee Benefit Expenses."

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Golkunda Commercial Pvt. Ltd. ITA No. 882/Ind/2025 – AY 2020-21 (v) The law on identical issue is settled by binding judicial precedents.

The Hon'ble Jurisdictional High Court of Madhya Pradesh in Steel Ingots (P) Ltd. (supra) has examined virtually identical facts i.e. critical heart surgery of a key director, Board Resolution, principle of

commercial expediency, etc. and held that the medical expenses reimbursed are allowable as a deduction u/s 37(1). Similarly, the Hon'ble Bombay High Court in Mehboob Productions (P) Ltd. (supra)

and co-ordinate bench of ITAT in M/s Roomag Motors & Controls (P) Ltd. (supra) have re-iterated the same view.

no reason to deviate from the legal position settled by Hon’ble Jurisdictional High Court and other courts noted above. Therefore, the disallowance of Rs.

15,24,457/- made/upheld by lower-authorities is not sustainable in law or on facts. We direct the deletion of the said disallowance and allow assessee's

claim.

Order pronounced in open court on 08/05/2026

Sd/- Sd/-

(PARESH M. JOSHI) (B.M. BIYANI) JUDICIAL MEMBER ACCOUNTANT MEMBER Indore

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Golkunda Commercial Pvt. Ltd. ITA No. 882/Ind/2025 – AY 2020-21

िदनांक/Dated : 08/05/2026

Patel/Sr. PS Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order E COPY Sr. Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore

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