| The Tax Publishers2021 TaxPub(DT) 5369 (Mum-Trib) INCOME TAX ACT, 1961
Section 37(1), Expln.
CBDT is divested of its powers to enlarge the scope of MCI Regulations, 2002 by extending the same to pharmaceutical companies without any enabling provision either under the IT Act or the Indian Medical Council (Professional conduct, Etiquette and Ethics) Regulations. Accordingly, expenses towards gifts, travel facility, conference expenses or similar freebies given to medical practitioners having been incurred wholly and exclusively by assessee for the purpose of its business, thus, by no means, being violative of any provision of law were duly allowable as a deduction within the meaning of section 37(1).
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Business expenditure - Expenditure incurred by assessee towards travelling, stay and payment of honorarium fees to doctors - Pharmaceutical company - AO made disallowance in view of CBDT Circular No. 5/2012, dated 1-8-2012 read with the MCI Regulations
Assessee, a pharmaceutical company, incurred expenses towards gifts, travel facility, conference expenses or similar freebies given to medical practitioners. AO disallowed deduction in view of CBDT Circular No. 5/2012, dated 1-8-2012 read with the MCI Regulations, 2002. Held: CBDT is divested of its powers to enlarge the scope of MCI Regulations by extending the same to pharmaceutical companies without any enabling provision either under the IT Act or the Indian Medical Council (Professional conduct, Etiquette and Ethics) Regulations, 2002. Accordingly, expenses in question having been incurred wholly and exclusively by assessee for the purpose of its business, thus, by no means being violative of any provision of law were duly allowable as a deduction within the meaning of section 37(1).
Followed:Aristo Pharmaceuticals (P) Ltd. v. Asstt. CIT (ITA No. 6680/Mum/2012, dated 26-7-2018) : 2018 TaxPub(DT) 5275 (Mum-Trib).
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2015-16
IN THE ITAT, MUMBAI BENCH
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