Zuventus Healthcare Ltd, Pune V. Deputy Commissioner of Income tax, Pune

ITA 1433/PUN/2017

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 2827 (ITAT-PUNE)
• Duration Of Justice: 4 year(s) 11 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-05-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 05-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Earning of tax free income
• Section: 143(3); 14A; 37(1)

Judgement Text

आयकर अपीऱीय अधिकरण “ए” न्यायपीठ पुणे में । IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, PUNE BEFORE SHRI S.S.GODARA, JM AND SHRI DR. DIPAK P. RIPOTE, AM आयकर अपीऱ सं. / ITA No.1433/PUN/2017 ननधधारण वषा / Assessment Year : 2012-13 Zuventus Healthcare Ltd., “Emcure House”, T-184, MIDC, Bhosari, Pune – 411 026 PAN : AAACZ1513C .......अपऩलधथी / Appellant बनधम / V/s. DCIT, Circle 10, Pune ......प्रत्यथी / Respondent Assessee by : Shri Nikhil Pathak Revenue by : Shri S. P. Walimbe सपनवधई की तधरऩख / Date of Hearing : 21.04.2022 घोषणध की तधरऩख / Date of Pronouncement : 06.05.2022 आदेश / ORDER PER S. S. GODARA, JM : 1. This assessee’s appeal for A.Y. 2012-13 is directed against the CIT(A) - 6, Pune’s order dated 28/04/2017 in case No. PN/CIT(A)-V/DCIT Cir- 10/716/ 2014-15 involving proceeding u/s. 143(3) of the Income Tax Act, 1961 ; in short "the Act. Heard both the parties. Case file perused. 2 ITA No.1433/PUN/2017 Zuventus Healthcare Ltd, 2. The assessee’s former substantive ground raised in the instant appeal seeks to reverse both the lower authorities action disallowing sales and marketing expenses of Rs.1,46,44,411/- incurred as alleged freebies to doctors. We note that CIT(A) detailed discussion has upheld full action to this effect in light of the Indian Medical Counsel Regulations 2002 read with CBDT circular No.5 of 2012 dated 01.08.2012 clarifying such an expenditure as not allowable u/s. 37(1) of the Act. 3. We make it clear the assessee has not even disputed the impugned freebies offered to doctors/medical practitioners which had been claimed in the nature of sales and marketing expenditure. That being the case, we quote hon’ble apex court’s latest decision [2022] 135 taxmann.com 286 (SC) Apex Laboratory P. Ltd. Vs. DCIT settling the law in department’s favour. We thus affirm the impugned disallowance. The assessee fails in its former substantive grievance. 4. Next comes section 14A r.w. rule 8D of the Income-Tax Rules,1962 disallowance of Rs.31,40,301/- made under both the lower proceedings. Suffice to say, the assessee has not derived any exempt income in the relevant previous year. Hon’ble jurisdictional high court’s recent decision in Principal CIT vs. Kohinoor Project (P) Ltd.,[2020] 121 taxmann.com 177(Bom) holds that the impugned disallowance does not apply in absence of any exempt income derived in the relevant previous year. We therefore adopt the very reasoning mutatis mutandis to delete the impugned disallowance. 3 ITA No.1433/PUN/2017 Zuventus Healthcare Ltd, No other ground has been pressed before us. 5. This assessee’s appeal is partly allowed in above terms. Order pronounced in the Open Court on this 6 th day of May, 2022. Sd/- Sd/- (DR.DIPAK P.RIPOTE) (S.S. GODARA) लेखध सदस्य/ ACCOUNTANT MEMBER न्यधनयक सदस्य/JUDICIAL MEMBER पपणे / Pune; ददनधांक / Dated : 6 th May, 2022. Ashwini आदेश की प्रनतनलनप अग्रेनषत / Copy of the Order forwarded to : 1. अपऩलधथी / The Appellant. 2. प्रत्यथी / The Respondent. 3. The CIT(A)-6, Pune. 4. The Pr.CIT-5,Pune. 5. नवभधगऩय प्रनतनननध, आयकर अपऩलऩय अनधकरण, “ए” बेंच, पपणे / DR, ITAT, “A” Bench, Pune. 6. गधर्ा फ़धइल / Guard File. आदेशधनपसधर / BY ORDER, // True Copy // Senior Private Secretary आयकर अपऩलऩय अनधकरण, पपणे / ITAT, Pune. 4 ITA No.1433/PUN/2017 Zuventus Healthcare Ltd, S.No. Details Date Initials 1 Draft dictated on 21.04.2022 2 Draft placed before author 04.05.2022 3 Draft proposed & placed before the Second Member 4 Draft discussed/approved by Second Member 5 Approved Draft comes to the Sr. PS/PS 6 Kept for pronouncement on 7 Date of uploading of Order 8 File sent to Bench Clerk 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R. 11 Date of Dispatch of order