The Dy. CIT, (OSD)-I, Circle-4, Ahmedabad V. M/s. La Renon Healthcare Pvt. Ltd., Ahmedabad

ITA 2380/AHD/2015

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 8878 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 1 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 11-08-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: JAYANT JHAVERI SR D R SHRI S N
• Keywords: Gift; Business expenditure; Retrospective amendment; Corroborative evidences; Onus to prove; Revenue expenditure; TDS
• Section: 143(3); 133(6); 37(1); 143(1); 250; 208; 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI PRAMOD KUMAR, VICE PRESIDENT & MS. MADHUMITA ROY, JUDICIAL MEMBER SL. NOS. ITA NO(S) ASSTT. YEAR(S) APPEAL(S) BY APPELLANT VS. RESPONDENT APPELLANT RESPONDENT 1. 2380/AHD/2015 2011-12 ACIT, CIRCLE 2(1)(2), AHMEDABAD 380 009 M/S. LA RENON HALTHCARE PVT. LTD., 208 ISCON ELEGANCE, CIRCLE-P, PRAHLADNAGAR, S. G. HIGHWAY, AHMEDABAD- 380 006. (PAN : AABCL 3431 G) 2. 3327/AHD/2016 2012-13 DY. CIT, CIRCLE 2(1)(2), AHMEDABAD 380 014. --DO-- 3. 1811/AHD/2017 2013-14 ACIT, CIRCLE 2(1)(2), AHMEDABAD --DO-- 4. 1812/AHD/2017 2014-15 --DO-- --DO-- APPELLANT BY : SHRI JAYANT JHAVERI, SR.D.R. RESPONDENT BY : SHRI S. N. SOPARKAR, SR. ADVOCATE & SHRI BANDISH SOPARKAR DATE OF HEARING 2 8 .0 8 .2019 DATE OF PRONOUNCEMENT 23.09.2019 O R D E R PER MS. MADHUMITA ROY - JM: THE BUNCH OF APPEALS FILED BY THE ASSESSEE ARE DIRE CTED AGAINST THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (A PPEALS)-2, AHMEDABAD ON THE DIFFERENT DATES UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED AS TO THE ACT) ARISING OUT OF THE ORDER PASSED BY THE ASSESSING OFFICER WHEREBY AND WHEREUNDER THE DISALL OWANCE OF PROFESSIONAL FESS MADE TO THE DOCTORS HAS BEEN ALLOWED AS BUSINE SS EXPENDITURE U/S 37(1) OF ITA NOS. 2380-AHD-2015, 3327-AHD-2016, 181 1 & 1812-AHD-2017 LA RENON HEALTHCARE PVT. LTD. ASST. YEARS 2011-12, 2012-13, 2013-14 & 2014-15 - 2 - THE ACT UPON DELETION OF ADDITION MADE BY THE ASSES SING OFFICER FOR ASSESSMENT YEAR 2011-12, 2012-13, 2013-14 AND 2014- 15 RESPECTIVELY. SINCE ALL THE APPEALS RELATE TO THE SAME ASSESSEE, THE SAME ARE HEARD ANALOGOUSLY AND ARE BEING DISPOSED OF BY A COMMON O RDER. 2. APPEAL BEING ITA NO.2380/AHD/2015 IS TAKEN AS A LEAD CASE. ITA NO.2380/AHD/2015 FOR A.Y. 2011-12: 3. THE SHORT POINT INVOLVED IN THIS PARTICULAR MATT ER IS THIS AS TO WHETHER THE PROCESSIONAL FEES PAID TO THE DOCTORS AS MEDICA L ADVISORS/ SR. CONSULTANT/ SCIENTIFIC CONSULTANT CAN BE ALLOWED AS BUSINESS EX PENDITURE WITHIN THE PROVISION OF SECTION 37(1) OF THE ACT. THE ASSESSEE COMPANY ENGAGED IN THE BUSINESS OF TRA DING OF PHARMACEUTICAL PRODUCTS, FILED ITS RETURN OF INCOME ON 31.08.2011 DECLARING TOTAL INCOME AT RS.3,73,28,340/- WHICH WAS DULY PRO CESSED U/S 143(1) OF THE ACT FOR A.Y. 2011-12. DURING THE COURSE OF ASSESSMENT PROCEEDING, IT WAS FOUND THAT THE ASSESSEE HAS CLAIMED PROFESSIONAL FEES PAID TO THE DOCTORS AMOUNTING TO RS.2,29,16,147/- WHEREUPON THE ASSESSEE WAS ASKED T O SUBMIT THE DETAILS OF THE SAME ALONG WITH THE DOCUMENTARY EVIDENCE. THE ASSES SING OFFICER FURTHER CALLED FOR INFORMATION U/S 133(6) OF THE ACT UPON W HICH THE DETAILS OF SERVICES PROVIDED BY THE DOCTORS TO THE ASSESSEE WERE SUBMIT TED INCLUDING THE AGREEMENTS ENTERED INTO BY AND BETWEEN THE ASSESSEE COMPANY AND THE DOCTORS WHICH, HOWEVER, ACCORDING TO THE LEARNED ASSESSING OFFICER DO NOT CONTAIN THE DETAILS OF CLINICAL STUDIES CONDUCTED, PERIOD OF ST UDY BY THOSE DOCTORS. OTHER ITA NOS. 2380-AHD-2015, 3327-AHD-2016, 181 1 & 1812-AHD-2017 LA RENON HEALTHCARE PVT. LTD. ASST. YEARS 2011-12, 2012-13, 2013-14 & 2014-15 - 3 - RELEVANT REPORTS WERE ALSO NOT ANNEXED AS OBSERVED BY THE LEARNED AO. FINALLY THE EXPENDITURE WAS NOT ALLOWED BY THE ASSESSING OF FICER FOR THE FOLLOWING REASONS: (I) IT WAS EXPLAINED THAT DOCTORS HAVE PROVIDED TRAINING TO THE TEAM OF STAFF BUT DETAILS OF SUCH TRAINING ARE NOT GIVEN. I T IS ALSO OBSERVED BY HIM THAT PARA-MEDICAL STAFF IS NOT EMPLOYEES OF THE COMPANY. IT IS OBSERVED BY HIM THAT DOCUMENTARY EVIDENCE OF TRAINI NG SESSIONS HELD AND DETAILS THEREOF LIKE PARTICIPANTS, SUBJECT OF D ISCUSSION, ETC., HAVE NOT BEEN SUBMITTED. (II) THE APPELLANT HAD EXPLAINED BEFORE THE AS SESSING OFFICER THAT IT HAD ARRANGED PROGRAMS FOR HOME GUARD SOCIETY OF GUJARAT AND 2500 HOME GUARDS ATTENDED WITH FOUR EMINENT AND RESPECTE D PRACTITIONERS CARRYING OUT CHILDREN'S KIDNEY DISEASE AWARENESS PR OGRAM. THE ASSESSING OFFICER HAS OBSERVED THAT IT CAN BE TERME D AS CSR ACTIVITY OF THE COMPANY AND IT NO WAY QUALIFIES TO BE TERMED AS BUSINESS EXPENDITURE OF THE COMPANY. (III) IT IS CONTENDED BY THE ASSESSING OFFICER T HAT COMPANY HAD CLAIMED THAT DOCTORS HAVE HELPED IN CONDUCTING CLINICAL STU DIES POST-MARKETING SURVEILLANCE STUDY FOR DIFFERENT DRUGS. WITH REFERE NCE TO THIS, THE ASSESSING OFFICER HAS OBSERVED THAT FOR ANY PHARMAC EUTICAL COMPANY INTRODUCING NEW FORMULATIONS, IT HAS TO OBTAIN REPO RT FROM CONTRACT RESEARCH ORGANIZATIONS OR THEMSELVES CARRYOUT RESEA RCH STUDIES AND GENERATE REPORTS AND SUCH REPORTS IN THE PRESCRIBED FORM ARE TO BE SUBMITTED TO THE DRUG CONTROLLER AND APPROVAL HAS T O BE OBTAINED. IN THIS PROCEDURE, THE APPELLANT HAS NOT SUBMITTED THE ROLE OF DOCTORS TO WHOM PROFESSIONAL FEES ARE PAID AS TO HOW THEY HAVE CONDUCTED CLINICAL TRIALS. HE HAS ALSO QUESTIONED AS TO WHO W ERE THE PATIENTS ON WHOM SUCH CLINICAL STUDIES WERE CONDUCTED. (IV) THE APPELLANT HAD SUBMITTED COPIES OF CERT IFICATES ISSUED BY SCIENTIFIC CONSULTANTS OR MEDICAL ADVISORS WHICH PROVIDE COMPR EHENSIVE DETAILS ABOUT THE SERVICES RENDERED DURING THE FY 2010-11 T O THE APPELLANT. WITH REFERENCE TO THIS IT IS OBSERVED BY THE ASSESS ING OFFICER THAT THE DOCTORS HAVE ISSUED IDENTICAL CERTIFICATES MENTIONI NG DIFFERENT SERVICES PROVIDED AS PER THE AGREEMENTS. (V) NO BASIS FOR THE PROFESSIONAL FEES PAID T O DOCTORS FOR SUCH SERVICES WAS GIVEN. (VI) THE APPELLANT HAD EXPLAINED THAT THE EXPENDIT URE WAS COVERED BY CLAUSE (G) 'AFFILIATION' WHEREBY A MEDICAL PRACTITI ONER MAY WORK FOR ITA NOS. 2380-AHD-2015, 3327-AHD-2016, 181 1 & 1812-AHD-2017 LA RENON HEALTHCARE PVT. LTD. ASST. YEARS 2011-12, 2012-13, 2013-14 & 2014-15 - 4 - PHARMACEUTICAL AND HEALTHCARE INDUSTRY IN ADVISORY CAPACITY, AS CONSULTANT, RESEARCHER, OR IN ANY OTHER PROFESSIONA L CAPACITY AND THEY SHALL ENSURE THEIR PROFESSIONAL INTEGRITY AND FREED OM ARE MAINTAINED, THE PATIENTS' INTEREST IS NOT COMPROMISED, THE AFFI LIATIONS ARE WITHIN LAW AND THE AFFILIATION IS TRANSPARENT AND DISCLOSE D. THE ASSESSING OFFICER HAS NOT ACCEPTED THIS EXPLANATION STATING T HAT NO DOCUMENTARY EVIDENCES ARE SUBMITTED TO SUPPORT THE CLAIM THAT T HE DOCTORS HAVE WORKED AS CONSULTANTS/IN ADVISORY CAPACITY. IT IS S TATED BY HIM THAT THE APPELLANT'S EXPLANATION THAT PAYMENTS ARE MADE THROUGH CHEQUES AND TDS IS ALSO DEDUCTED IS NO PROOF OF GENUINENESS OF TRANSACTION. (VII) REFERENCE IS MADE BY THE ASSESSING OFFICE R TO CIRCULAR NO. 5 OF 2012 OF CBDT AND JUDGMENT OF HIMACHAL PRADESH HIGH COURT AND ALSO MCI GUIDELINES AND STATED THAT ANY MEDICAL PRACTITI ONER OR PROFESSIONAL ASSOCIATES IS PROHIBITED FROM ACCEPTIN G GIFTS, TRAVEL FACILITY, HOSPITALITY OR MONETARY GRANT FROM ANY PH ARMACEUTICAL COMPANY AND SUCH EXPENSES ARE TO BE DISALLOWED UNDE R SECTION 37(1). III) THE APPELLANT HAD EXPLAINED THAT MCI GUIDEL INES ARE APPLICABLE TO DOCTORS AND NOT TO THE COMPANY. IN THIS REGARD IT I S STATED BY THE ASSESSING OFFICER THAT IT IS THE ONUS OF THE ASSESS EE TO PROVE THAT THE PAYMENTS ARE GENUINE AND ALLOWABLE UNDER SECTION 37 (1). THE ORDER PASSED BY THE LEARNED AO WAS QUASHED BY THE LEARNED CIT(A) WHEREUPON THE ADDITION WAS DELETED. HENCE TH E INSTANT APPEAL BEFORE US. 4. AT THE TIME OF HEARING OF THE INSTANT APPEAL, TH E LEARNED COUNSEL APPEARING FOR THE ASSESSEE SUBMITTED BEFORE US THAT THE GENUINENESS OF TRANSACTION OF THE EXPENDITURE HAS BEEN ESTABLISHED BY THE ASSESSEE. IT HAS FURTHER ESTABLISHED THAT SUCH EXPENDITURE INCURRED FOR BUSINESS PURPOSES ONLY AS PRESCRIBED BY LAW. ACCORDING TO THE LEARNED AR THE CBDT CIRCULAR HAS NO MANNER OF APPLICATION, NEITHER THE GUIDELINES FRAME D BY THE MEDICAL COUNCIL OF INDIA IS APPLICABLE TO THE INSTANT CASE BEFORE US. SINCE ALL THE PAYMENTS HAVE BEEN MADE THROUGH CHEQUES AND TDS HAS BEEN DEDUCTED NO ADVERSE VIEW CAN BE TAKEN BY THE MEDICAL COUNCIL OF INDIA AGAINST TH OSE DOCUMENTS OR APPELLANT ITA NOS. 2380-AHD-2015, 3327-AHD-2016, 181 1 & 1812-AHD-2017 LA RENON HEALTHCARE PVT. LTD. ASST. YEARS 2011-12, 2012-13, 2013-14 & 2014-15 - 5 - COMPANY. THE LEARNED COUNSEL ALSO RELIED UPON THE J UDGMENT PASSED BY THIS LEARNED TRIBUNAL IN THE MATTER OF CADILA PHARMACEUT ICALS LTD.-VS-DCIT, RANGE-1, CIRCLE 1(1)(2), AHMEDABAD AS WELL AS IN THE MATTER OF ITO-VS- SUNFLOWER PHARMACY. HE, THEREFORE, RELIES UPON THE ORDER PASSED BY THE LEARNED CIT(A). ON THE CONTRARY, THE LEARNED DR REL IED UPON THE JUDGMENT PASSED BY THE HONBLE HIMACHAL PRADESH HIGH COURT I N THE MATTER OF INDIAN PHARMACEUTICAL INDUSTRY (SSI)-VS-CBDT. HE FURTHER C ONTENDED THAT EXPENDITURE HAS BEEN INCURRED BY THE ASSESSEE FOR T HE PURPOSE WHICH IS RESTRICTED BY THE INDIAN MEDICAL COUNCIL (PROFESSIO NAL CONDUCT ETIQUETTE AND ETHICS) REGULATIONS 2002 WHEREBY AND WHEREUNDER THE PROHIBITION HAS BEEN IMPOSED UPON ANY MEDICAL PRACTITIONER OR THEIR PROF ESSIONAL ASSOCIATES FROM ACCEPTING ANY GIFT, TRAVEL FACILITY, HOSPITALITY, C ASH OR MONETARY GRANT FROM ANY PHARMACEUTICAL AND ALLIED HEALTH SECTOR INDUSTRIES. HE, FURTHER RELIES UPON CIRCULAR BEING NO.5/2012. FINALLY, THE LEARNED DR R ELIED UPON THE ORDER PASSED BY THE LEARNED AO. THE LEARNED ASSESSING OFFICER HAS OBSERVED THAT THE SAID PAYMENT MADE TO THE DOCTORS AS PROFESSIONAL FEES IS RESTRIC TED BY MCI GUIDELINES AND CBDT CIRCULAR NO.5 OF 2012 AS WELL AS THE JUDGMENT PASSED BY THE HONBLE HIMACHAL PRADESH HIGH COURT AND ALSO THE GUIDELINES FRAMED BY THE MEDICAL COUNCIL OF INDIA. THOSE PROFESSIONALS ARE PROHIBITED FROM ACCEPTING ANY GIFT, TRAVEL FACILITY, HOSPITALITY, CASH OR MONETARY GRANT FROM ANY PHARMACEUTICAL AND ALLIED HEALTH SECTOR INDUSTRIES AS PER THE MEDICAL COUNCIL OF INDIAS REGULATION AND SUCH EXPENSES ARE NOT ALLOWABLE U/S 37(1) OF THE AC T. ITA NOS. 2380-AHD-2015, 3327-AHD-2016, 181 1 & 1812-AHD-2017 LA RENON HEALTHCARE PVT. LTD. ASST. YEARS 2011-12, 2012-13, 2013-14 & 2014-15 - 6 - THE CASE OF THE ASSESSEE IS THIS THAT IT IS IN THE BUSINESS OF PRODUCTS IN THE FIELD OF NEPHROLOGY WHICH IS USED FOR IN THE VA RIOUS KIDNEY DISEASES. THE APPELLANT-COMPANY IS ALWAYS IN THE PROCESS OF PRODU CT DEVELOPMENT, DISSEMINATION OF INFORMATION ABOUT THE NEW PRODUCTS AND EVOLVING MECHANISM OF RECEIVING FEEDBACK FROM HOSPITALS, HEALTHCARE PR OFESSIONALS, ETC. THE COMPANY HAS LAUNCHED VARIOUS PROGRAMMES OF FIELD FO RCE DETAILING AND SAMPLING, CONTINUING MEDICAL EDUCATION (CME) INCLUD ING DISEASE AWARENESS PROGRAMMES, PROFESSIONAL JOURNAL REFERENCES. IN THI S WAY IT COULD ENSURE THAT HEALTHCARE PROFESSIONAL AND THE PUBLIC HAVE ACCESS TO THE INFORMATION THEY NEED, THAT PATIENTS HAVE ACCESS TO THE HEALTH CARE PRODUCTS THEY NEED AND THAT THE PRODUCTS ARE PRESCRIBED AND USED IN A MANNER TH AT PROVIDES THE MAXIMUM HEALTHCARE BENEFIT TO PATIENTS. IT WAS ALSO ENSURED THAT ALL THE ABOVE ACTIVITIES COMPLY WITH HIGH ETHICAL STANDARDS. THE COMPANY HAS FURTHER ENTERED INTO AN AGREEMENT WITH 63 MEDICAL PROFESSIONALS WHO WOULD C ARRY OUT THE ABOVE FACILITIES AS SCIENTIFIC CONSULTANTS/MEDICAL ADVISO RS IN ORDER TO ACHIEVE THE TARGETS. IT IS THE FURTHER CASE MADE OUT BY THE ASS ESSEE THAT MCA GUIDELINES BY AND UNDER PARA 6.8(G) PROVIDES THAT MEDICAL PRACTIT IONERS MAY WORK FOR PHARMACEUTICAL COMPANY IN THE ADVISORY CAPACITY AS CONSULTANT/ PROFESSIONAL. OTHER THAN THE SERVICE AS PER THE AGREEMENT ENTERED INTO WITH THE DOCTORS NO OTHER BENEFIT WAS OBTAINED BY THE ASSESSEE. NEITHER ANY SERVICE HAS BEEN RENDERED BY THE MEDICAL PROFESSIONAL WHICH IS UNLAW FUL OR UNETHICAL. APART FROM THAT, IT WAS FURTHER CONTENDED BY THE ASSESSEE BEFORE THE AUTHORITIES BELOW THAT THOSE PAYMENTS WERE MADE THROUGH BANKING CHANN ELS AND TDS HAS BEEN DEDUCTED AS WELL. IN THAT VIEW OF THE MATTER, THER E WAS NO INFRINGEMENT OF ANY PROVISION OF MCIS REGULATIONS AS SUBMITTED BY THE ASSESSEE. ULTIMATELY, IN APPEAL THE ADDITION MADE BY THE ASSESSING OFFICER W AS DELETED BY THE LEARNED CIT(A), UPON PERUSAL OF THE DETAILS OF SERVICES REN DERED BY THE DOCTORS, WHO ARE NOT IN ANY WAY RELATED TO THE APPELLANT COMPANY OR ITS DIRECTORS AND ARE ITA NOS. 2380-AHD-2015, 3327-AHD-2016, 181 1 & 1812-AHD-2017 LA RENON HEALTHCARE PVT. LTD. ASST. YEARS 2011-12, 2012-13, 2013-14 & 2014-15 - 7 - REPUTED DOCTORS STATIONED AT VARIOUS PLACES IN INDI A. THE DOCUMENTARY EVIDENCES IN SUPPORT OF THE CLAIM OF THE ASSESSEE R EGARDING PAYMENT AS WELL AS THE AGREEMENT EXECUTED WITH DOCTORS, CONFIRMATION O F SUCH DOCTORS AS WELL AS THE DETAILS OF SERVICES RENDERED BY THEM, THE LEDGE R ACCOUNTS CORRESPONDING WITH DOCTORS, THE SCIENTIFIC BROCHURES, TRAINING MA NUALS, RESEARCH PAPERS PUBLISHED BY EMINENT DOCTORS IN RESPECT OF THE PROD UCTS DEVELOPED BY THE APPELLANT COMPANY WERE ALSO CONSIDERED BY THE FIRST APPELLANT AUTHORITY AS IT APPEARS FROM THE ORDER IMPUGNED BEFORE US. 5. HEARD THE RESPECTIVE PARTIES, PERUSED THE RELEVA NT MATERIALS AVAILABLE ON RECORD INCLUDING THE JUDGMENTS RELIED UPON BY THE R ESPECTIVE PARTIES. IT FURTHER APPEARS FROM THE RECORDS THAT THE LEARNE D CIT(A) WHILE HOLDING THE ISSUE IN FAVOUR OF THE ASSESSEE BY DELE TING THE ADDITION MADE BY THE LEARNED AO OBSERVED AS FOLLOWS: ON A CAREFUL CONSIDERATION OF ENTIRE FACTS OF THE CASE, IT IS NOTED THAT THE ASSESSING OFFICER HAS NOT DISPUTED THE APPOINTMENT OF DOCTORS AND THE SERVICES AS PER THE AGREEMENTS. HOWEVER, HE HAS DIS ALLOWED THE CLAIM MAINLY FOR WANT OF DOCUMENTARY EVIDENCE FOR THE SERVICES A S STATED IN THE CONFIRMATION PROVIDED BY THE DOCTORS. THE ASSESSING OFFICER HAS ALSO RELIED ON THE MEDICAL COUNCIL'S GUIDELINES AND THE CIRCULA R NO. 5 OF CBDT. ON THE OTHER HAND, THE APPELLANT HAS SUBMITTED THE DETAILS OF SERVICES RENDERED BY DOCTORS WHO ARE NOT IN ANY WAY RELATED TO THE APPEL LANT COMPANY OR ITS DIRECTORS AND ARE REPUTED DOCTORS STATIONED AT VARI OUS PLACES IN INDIA. THE APPELLANT HAS SUBMITTED THE VARIOUS DOCUMENTARY EVI DENCES IN SUPPORT OF ITS CLAIM THAT PAYMENT TO THEM ARE GENUINE BUSINESS EXP ENDITURE WHICH MAINLY INCLUDES AGREEMENTS EXECUTED WITH DOCTORS, CONFIRMA TIONS OF SUCH DOCTORS WHEREIN DETAILS OF SERVICES' RENDERED ARE CLEARLY M ENTIONED, LEDGER ACCOUNTS CORRESPONDENCE WITH DOCTORS. THE APPELLANT HAS ALSO SUBMITTED SUPPORTING EVIDENCES IN THE FORM OF COPY OF SCIENTIFIC BROCHUR ES, TRAINING MANUALS, RESEARCH PAPERS PUBLISHED BY EMINENT DOCTORS IN THE RESPECT OF PRODUCTS DEVELOPED BY IT. IT IS NOTED THAT APPELLANT HAS MAD E PAYMENT THROUGH PROPER BANKING CHANNELS WHICH PROVE THAT PAYMENT IS GENUIN E BUSINESS EXPENDITURE AND INCURRED AS PER BUSINESS EXPEDIENCY. THE TAX' H AS ALSO BEEN DEDUCTED AT SOURCE. ITA NOS. 2380-AHD-2015, 3327-AHD-2016, 181 1 & 1812-AHD-2017 LA RENON HEALTHCARE PVT. LTD. ASST. YEARS 2011-12, 2012-13, 2013-14 & 2014-15 - 8 - IT IS ALSO NOTED THAT ENQUIRY WAS CONDUCTED UNDER S ECTION 133(6) BY THE ASSESSING OFFICER AND IN RESPONSE THERETO THE DOCTO RS HAVE GIVEN CONFIRMATION BY WAY OF CERTIFICATES WHICH ALSO ESTA BLISH THE ACTUAL RENDERING OF SERVICES BY THEM AND THE GENUINENESS OF SUCH SER VICES CANNOT BE DOUBTED. THE APPELLANT HAS FURTHER GIVEN DETAILS OF THE SERV ICES RENDERED BY EACH OF THE DOCTORS, THE NATURE OF WHICH IS NARRATED IN THE ABO VE CHART AND THESE DETAILS WERE ALSO PROVIDED TO ASSESSING OFFICER AND SAME AR E NOT FOUND TO BE INCORRECT. IN THE COURSE OF APPELLATE PROCEEDINGS, ON QUESTIONING, THE APPELLANT ON SPECIMEN BASIS, CERTAIN DETAILS OF VOU CHERS WERE PRODUCED ABOUT THE ACTUAL CONDUCTING OF SEMINARS/TRAINING PROGRAMS AT CERTAIN PLACES. THESE VOUCHERS ALSO SUPPORT THE APPELLANT'S EXPLANATION T HAT SUCH SERVICES ARE ACTUALLY RENDERED BY THE DOCTORS. THUS, THE APPELLA NT HAS ESTABLISHED THE NECESSITY FOR THE EXPENDITURE AGAINST THE SERVICES GENUINELY RENDERED BY THE DOCTORS. INSOFAR AS THE ASSESSING OFFICER'S OBSERVATION THAT THERE IS DIFFERENCE IN PAYMENT TO VARIOUS DOCTORS FOR SIMILAR SERVICES, IT IS NOTICED THAT THE PAYMENTS ARE MADE AS PER THE MUTUAL AGREEMENT WITH THE DOCTORS AND IT IS NOT THE CASE THAT ANY OF THE DOCTORS ARE RELATED AND HE NCE THEY ARE PAID HIGHER AMOUNT. AS SUCH, THE PAYMENT IS MADE FOR THE SERVIC ES RENDERED BY DOCTORS, AS PER THE AGREEMENT AND OUT OF'C6MMERCIAL EXPEDIEN CY. IT IS SETTLED LEGAL LAW THAT REVENUE COULD NOT SIT IN THE ARM'S CHAIR OF TH E ASSESSEE AND DECIDE AS TO HOW AFFAIRS OF THE BUSINESS WERE TO BE RUN AND WAST EFUL OR EXCESSIVE EXPENDITURE WAS TO BE CURTAILED. THE QUESTION OF CO MMERCIAL EXPEDIENCY WAS TO BE JUDGED BY THE ASSESSEE AND NOT BY THE ASSESSI NG OFFICER. THE APPELLANT HAS RIGHTLY PLACED RELIANCE ON THE DECISION OF HON' BLE DELHI HIGH COURT IN THE CASE OF CIT V/S. ORACLE INDIA (P) LIMITED, WHICH SQ UARELY APPLIES TO THE FACTS OF THE CASE. THE APPELLANT HAS ALSO EXPLAINED THAT THE PAYMENT I S MADE BY CHEQUE AND TDS HAS BEEN DEDUCTED. THE DETAILS SUBMITTED BY APPELLANT CLEARLY SUGGEST THAT IT HAS DISCHARGED THE ONUS CASTED UPON IT TO PROVE THAT GENUINE BUSINESS EXPENDITURE HAS BEEN INCURRED AND CLAIMED AS REVENUE EXPENDITURE IN RETURN OF INCOME. THE AO HAS NOT BROUGHT ON RECO RD ANY CONTRARY EVIDENCE TO PROVE THAT THE PAYMENTS ARE NOT GENUINE. THE APP ELLANT HAS RIGHTLY PLACED RELIANCE ON THE JUDGEMENT OF HON'BLE GUJARAT HIGH C OURT IN THE CASE OF CIT V/S MUNDRA PORTS & SEZ LIMITED 223 TAXMAN 150 WHERE IN IT HAS BEEN HELD THAT 'WHERE PAYMENT HAD BEEN MADE THROUGH BANKING C HANNELS AND TAX WAS DEDUCTED AT SOURCE AND PARTY WAS A/SO NOF FOUND FO BE RELATED TO ASSESSEE, ASSESSING OFFICER COULD NOT TREAT EXPENSE AS BOGUS EXPENSE.' THE APPELLANT HAS ALSO RIGHTLY PLACED RELIANCE ON RATIO OF DECISI ON OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT V/S SIDDARTHA TRADE LINKS (P.) LTD 206 TAXMAN 92 WHEREIN THE COURT HAS HELD AS UNDER: II. SECTION 37(1) OF THE INCOME-TAX ACT, 1961 - BU SINESS EXPENDITURE - ALLOWABILITY OF - ASSESSEE-COMPANY EFFECTED SALES T HROUGH SALES ITA NOS. 2380-AHD-2015, 3327-AHD-2016, 181 1 & 1812-AHD-2017 LA RENON HEALTHCARE PVT. LTD. ASST. YEARS 2011-12, 2012-13, 2013-14 & 2014-15 - 9 - REPRESENTATIVES/AGENTS - COMMISSION OR BROKERAGE WA S BEING PAID TO AGENTS - ASSESSING OFFICER DISALLOWED COMMISSION PA YMENT ON GROUND THAT ADDRESSES OF SOME OF RECIPIENTS WERE SAME THOU GH PERSONS/INDIVIDUALS WERE DIFFERENT - IN ASSESSMENT ORDER IT WAS ALSO MENTIONED THAT IN SOME CASES PAN OR ADDRESSES WERE NOT FINISHED -ON APPEAL. TRIBUNAL HIGHLIGHTED THAT OUT OF 16 PARTIES , PAN OF 14 PARTIES WERE SUBMITTED TO ASSESSING OFFICER - MOREOVER, ASS ESSEE HAD; ALSO .DEDUCTED TDS AT RATE OF 5 PER CENT AND-IDS RETURNS WAS FILED- TRIBUNAL, THUS, ALLOWED CLAIM OF ASSESSEE HOLDING T HAT ASSESSEE HAD DULY ESTABLISHED THAT SUFFICIENT SERVICES WERE REND ERED FOR PAYMENT OF COMMISSION - ON REVENUE'S APPEAL, IT WAS NOTED THAT ASSESSING OFFICER DID NOT ISSUE ANY SUMMONS OR CALL UPON ASSESSEE TO PRODUCE SAID AGENTS FOR EXAMINATION - MOREOVER, AGREEMENTS WITH AGENTS AND ACTUAL PAYMENTS WERE ESTABLISHED - WHETHER IN VIEW OF AFOR ESAID, IMPUGNED ORDER PASSED BY TRIBUNAL WAS TO BE UPHELD -HELD, YE S [IN FAVOUR OF ASSESSEE]' FURTHER, HON'BLE DELHI ITAT IN THE CASE OF DC1T V/S JASPREET KAUR ITA NO. 4765 /DEL/ 2012 REFERRED IN APPELLANT'S SUB MISSION HAS HELD AS UNDER: 'APROPOS GROUND NO. 1, THE ASSESSEE IS REGULARLY AS SESSED TO TAX, MAINTAINING AUDITED BOOKS OF ACCOUNT. THE COMMISSIO N PAID TO SUB AGENTS IS THROUGH BANKING CHANNELS, SUPPORTED BY AG REEMENT, IDS THEREON IS DEDUCTED AND SERVICE TAX IS ALSO PAID. I N OUR CONSIDERED VIEW, THESE FACTS REASONABLY DISCHARGE THE BURDEN O F THE ASSESSEE FOR ESTABLISHING THE GENUINENESS AND BUSINESS EXPEDIENC Y OF THE EXPENSES. MERELY BECAUSE THE ASSESSEE COULD NOT PRODUCE SUB-A GENTS PHYSICALLY CANNOT BE HELD AGAINST HER. IN VIEW THEREOF, WE SEE NO INFIRMITY IN THE ORDER OF CIT(A), DELETING THE DISALLOWANCE. HIS ORD ER ON THIS IS ISSUE IS UPHELD' THE HON'BLE AHMEDABAD ITAT IN THE CASE OF ACIT V/S R.N. DOBARIA (I.T.A. NO.1788 / AHD/2009) VIDE ITS ORDER DATED 05 APRIL 2013 WHILE DEALING WITH DISALLOWANCE OF SUB-CONTRACT EXPENSES HAS ALSO HELD AS UNDER: 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND P ERUSED THE MATERIAL ON RECORD. IT IS AN UNDISPUTED FACT THAT T HE ASSESSEE SUBMITTED COMPLETE NAMES, ADDRESSES, PAN, CONFIRMATION OF I T RETURNS, BANK STATEMENT OF THE SUB-CONTRACTORS ALONG WITH DETAILS OF PROOF OF PAYMENT BEFORE A.O. LD. CIT(A) AND ALSO BEFORE US. LD. CIT( A) WHILE DELETING THE ADDITION HAS GIVEN FINDING THAT THE BOOK RESULT S OF THE ASSESSEE HAVE IMPROVED CONSIDERABLY DURING THE CURRENT YEAR AS COMPARED TO THE EARLIER YEAR AND THE ASSESSEE HAS FULLY DISCHAR GED THE ONUS OF PROVING THE SUB-CONTRACT EXPENSES. HE HAS FURTHER H ELD THAT THE A.O. HAS NOT BROUGHT ANY TANGIBLE EVIDENCE ON RECORD TO PROVE THAT THE EXPENSES WERE NOT GENUINE AND HAS MADE AD-HOC DISAL LOWANCE OF 25% ITA NOS. 2380-AHD-2015, 3327-AHD-2016, 181 1 & 1812-AHD-2017 LA RENON HEALTHCARE PVT. LTD. ASST. YEARS 2011-12, 2012-13, 2013-14 & 2014-15 - 10 - AND THE AFORESAID FINDING OF LD. CIJ(A) COULD NOT B E CONTROVERTED BY THE REVENUE BY BRINGING- ANY CONTRARY MATERIAL ON R ECORD. FURTHER, THE .ASSESSEE HAS ALSO DISCHARGED ITS ONUS BY SUBMITTIN G NAMES, ADDRESSES AND PAN OF THE CONTRACTOR BEFORE THE A.O. AS WELL A S BEFORE LD. CIT(A). WITH THE DETAILS MADE AVAILABLE BY THE ASSE SSEE TO THE A.O., HE HAS ALSO NOT SUMMONED ANY OF THE SUB- CONTRACTOR TO VERIFY THE GENUINENESS OF CONTRACTS. IN VIEW OF THESE FACTS, W E ARE OF THE VIEW THAT NO INTERFERENCE IS CALLED FOR IN THE ORDER OF LD. CIT(A) AND THUS, THIS GROUND OF THE REVENUE IS DISMISSED.' THE ABOVE DECISION IS ALSO UPHELD BY HON'BLE GUJARA T HIGH COURT IN 222 TAXMAN 24. THE DECISIONS REFERRED SUPRA CLEARLY SUGGEST THAT APPELLANT HAS DISCHARGED ITS ONUS TO PROVE GENUINENESS OF THE EXPENDITURE AND SAME IS ALLOWABLE BUSINESS EXPENDITURE U/S 37(1) OF THE ACT . THE AO HAS ALSO OBSERVED THAT APPELLANT HAS NOT SUB MITTED DETAILS OF PATIENTS ON WHICH CLINICAL STUDIES WERE CONDUCTED. IN THIS CONNECTION, IT IS NOTED THAT THAT APPELLANT HAS NOT MADE ANY PAYMENT TO VARIOUS DOCTORS FOR CARRYING OUT ANY CLINICAL STUDIES ON PATIENTS BUT D OCTORS HAVE PROVIDED SYSTEMATIC DATA BASE/FORMS OF CLINICAL STUDY BASED UPON THEIR EXPERIENCE AND ON THE BASIS OF FEEDBACK FROM VARIOUS PATIENTS AND IN TURN CLINICAL STUDIES ARE CONDUCTED ON THE PRODUCTS OF APPELLANT COMPANY FOR CONTINUOUSLY IMPROVING THE PRODUCTS OF THE APPELLANT COMPANY. REGARDING THE OBSERVATION OF THE AO THAT, PROGRAMS MADE BY APPELLANT TO GENERATE AWARENESS AMONG THE CHILDREN AND THEIR FAMILIES ABOUT KIDNEY DISEASES CAN AT BEST BE TERMED AS CORPORATE SOCIAL RESPONSIBILITY OF THE ASSESSEE COMPANY, BUT NO WAYS QUALIFIES TO BE TERME D AS BUSINESS EXPENSES. THIS OBSERVATION OF ASSESSING OFFICER CANNOT BE ACC EPTED AS BY CONDUCTING THESE PROGRAMS, INTERACTION WITH LARGE PEOPLE CAN B E MADE WHICH IN TURN HELP APPELLANT TO PROMOTE ITS MEDICINES IN THE MARKETS A ND HELPS TO INCREASE THE TURNOVER OF IT. THIS TYPE OF EXPENDITURE HAS DIRECT NEXUS WITH BUSINESS REQUIREMENT AND CANNOT BE HELD AS NON-BUSINESS EXPE NDITURE SIMPLY ON PRESUMPTION. IT IS FURTHER NOTED THAT AN OBSERVATION AND PERUSAL OF THE DETAILS SUBMITTED BY APPELLANT CLEARLY SHOW THAT IT IS NOT THE PAYMENT AS PROHIBITED BY CIRCULAR NO. 5 OF CBDT, BUT IS PAYMENT FOR PROFESSI ONAL SERVICES AS PER AGREEMENT AND IS ALSO PERMISSIBLE AS PER PARA 6.8(G ) OF THE MCI GUIDELINES AS DISCUSSED HEREIN ABOVE. THE AO WAS, THEREFORE, N OT RIGHT TO CONCLUDE THAT THE PAYMENT IS PROHIBITED BY THE CIRCULAR NO. 5 OF CBDT AND IS NOT ADMISSIBLE UNDER SECTION 37(1) OF THE ACT. IN VIEW OF THE ABOVE DISCUSSION, I AM OF THE CONSID ERED OPINION THAT THE AO WAS NOT JUSTIFIED IN MAKING DISALLOWANCE OF PROFESSIONAL FEES OF ITA NOS. 2380-AHD-2015, 3327-AHD-2016, 181 1 & 1812-AHD-2017 LA RENON HEALTHCARE PVT. LTD. ASST. YEARS 2011-12, 2012-13, 2013-14 & 2014-15 - 11 - RS.2,29,16,147/- AS SAME IS AN ALLOWABLE BUSINESS E XPENDITURE U/S 37(1) OF THE ACT. THE DISALLOWANCE MADE BY HIM IS THEREFORE DIRE CTED TO BE DELETED. THE GROUNDS OF APPEAL ARE ACCORDINGLY ALLOWED. APART FROM THAT, THE CHART GIVEN BY THE APPELLANT R EGARDING THE DETAILS OF THE MEDICAL PROFESSIONALS WHOSE PROFESSIONAL FEES A RE IN QUESTION HAS ALSO BEEN SCANNED BY THE FIRST APPELLATE AUTHORITY IN THE ORD ER IMPUGNED BEFORE US. THE JUDGMENT PASSED BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT- VS-MUNDRA PORT AND SEZ LTD. REPORTED IN 223 TAXMAN 150 WHEREIN IDENTICAL ISSUE HAS BEEN FINALIZED TO THIS EFFECT THAT WHEN P AYMENT HAD BEEN MADE THROUGH BANKING CHANNEL AND TAX WAS DEDUCTED AT SOU RCE AND THE PARTY WAS ALSO NOT FOUND TO RELATE TO THE ASSESSEE. THE ASSESSING OFFICER CANNOT TREAT THE EXPENSES AS BOGUS EXPENSES AS CORRECTLY BEEN MADE A PPLICABLE TO THE INSTANT CASE. RELIANCE WERE ALSO PLACED BY THE LEARNED CIT( A) ON THE JUDGMENT PASSED BY THE HONBLE DELHI HIGH COURT IN THE MATTER OF CI T-VS-SIDDARTHA TRADE LINKS (PVT.) LTD. REPORTED IN [2012] 206 TAXMAN 92 (DELHI). WHILE HOLDING THAT THE ASSESSEE HAD DULY ESTABLISHED THAT SUFFICI ENT SERVICES WERE RENDERED FOR PAYMENT OF PROFESSIONAL FEES THE JUDGMENT OF THE HO NBLE DELHI HIGH COURT IN THE CASE OF DCIT-VS-JASPREET KAUR IN DECIDING THE I SSUE OF BURDEN OF THE ASSESSEE FOR ESTABLISHING THE GENUINENESS AND BUSIN ESS EXPEDIENCY OF THE EXPENSES WERE RIGHTLY CONSIDERED AND APPLIED. ONCE THE PAYMENT OF PROFESSIONAL FEES WERE MADE IN TERMS OF THE AGREEME NT WHICH HAS NOT BEEN PRESCRIBED BY THE CBDT CIRCULAR NO.5/2012 FOR RENDE RING PROFESSIONAL SERVICES OR EITHER PERMISSIBLE AS PER PARA 6.8(G) M CI GUIDELINES, THE SAME CANNOT BE QUESTIONED BY THE TAX AUTHORITIES AND HEN CE THE ORDER PASSED BY THE LEARNED CIT(A) IS ACCORDING TO US, JUST AND PROPER AND WITHOUT ANY AMBIGUITY. SO FAR AS THE JUDGMENT PASSED BY THE HONBLE HIMACH AL PRADESH HIGH COURT IN THE CASE OF INDIAN PHARMACEUTICAL INDUSTRY (SSI)-VS -CBDT IS CONCERNED, WE FIND THAT THE RATIO LAID DOWN BY THE HONBLE COURT TO THIS EFFECT THAT IF THE ITA NOS. 2380-AHD-2015, 3327-AHD-2016, 181 1 & 1812-AHD-2017 LA RENON HEALTHCARE PVT. LTD. ASST. YEARS 2011-12, 2012-13, 2013-14 & 2014-15 - 12 - EXPENDITURE IS NOT IN VIOLATION OF REGULATION FRAME D BY THE MEDICAL COUNCIL THEN IT MAY NOT BE TAXABLE EXPENDITURE. SINCE WE HA VE ALREADY HELD THAT THE MEDICAL PROFESSIONAL FEE IS NO WAY A VIOLATION OF R EGULATION OF MCI OR THAT THE CBDT CIRCULAR NO.5 WE FIND NO ADVERSE EFFECT OF THI S JUDGMENT AGAINST THE ASSESSEE. WE HAVE FURTHER CAREFULLY CONSIDERED THE JUDGMENT PASSED BY THE HONBLE ITAT, AHMEDABAD BENCH IN THE MATTER OF CADI LA PHARMACEUTICALS LTD. WHILE DEALING WITH THIS PARTICULAR ISSUE THE H ONBLE TRIBUNAL OBSERVED AS FOLLOWS: IN THE PRESENT DAY CONTEXT, THE MALADY OF CORRUPTI ON IS ENTERING INTO ALL THE VITAL ORGANS OF THE SOCIETY AND SITUATION HAS REACH ED WHERE THESE ILLEGAL ACTS HAVE BEEN ACCEPTED AS A NORMAL PRACTICE AND THE ATT EMPT TO PREVENT, LET ALONE ERADICATE CORRUPTION, IS BEYOND REACH. IF THE COURT S WERE TO ACCORD THEIR APPROVAL TO SUCH TRANSACTIONS, THAT WOULD BE THE EN D OF THE RULE OF LAW AND AMOUNTS TO UPHOLDING IMMORAL ACTIONS BY LAW COURTS. SUCH AN ACTION GETS CREDIBILITY AND RESPECT AND IT WILL BE PERPETUATED WITH THE SUPPORT OF THE COURT ORDERS. WHEN RECEIPT OF BRIBE AND PAYMENT OF BRIBE BY PUBLIC SERVANTS IS HELD TO BE AN OFFENCE AND THE PARLIAMENT HAS PASSED LEGI SLATION FOR PREVENTING THE SAME, MERELY BECAUSE THOSE LAWS ARE NOT APPLICABLE TO PRIVATE PERSONS, IT CANNOT BE SAID THAT IT IS MORAL, DECEIVING OR PAYIN G BRIBE IS A CRIME. PERSONS INDULGING IN THE SAME CANNOT BE PROTECTED BY LAW CO URTS. THE COURTS CANNOT EXTEND THEIR AID TO UPHOLD SUCH TRANSACTIONS. IN TH AT VIEW OF THE MATTER, EVEN IF IT IS NOT AN OFFENCE AS CONTENDED CERTAINLY, IT IS IMMORAL AND IT CAUSES INJURY TO PUBLIC AND THEREFORE THE EXPENDITURE INCURRED IN SU CH IMMORAL ACTS CANNOT BE CONSTRUED AS EXPENDITURE INCURRED FOR THE PURPOSE O F PROFITS AND GAINS OF BUSINESS OR PROFESSION AND THE BENEFIT OF DEDUCTION OR ALLOWANCE UNDER THE PARLIAMENTARY LEGISLATION CANNOT BE EXTENDED TO SUC H PERSONS OR TO SUCH EXPENDITURE. SUCH A QUESTION WOULD FALL WITHIN THE EXPLANATION-OF S. 37 AND IS NOT DEDUCTIBLE UNDER S. 37.- J.K PANTHAKI & CO. V. ITO (2011) 57 DTR (BANG) (TRIB) 233 : (2011) 139 TTJ (BANG) 337 AFFIRMED.' (PARA 45) 13.2.9 IN VIEW OF THE DISCUSSION AS ABOVE, THE OBJECTION R AISED BY THE ASSESSEE IS REJECTED.' 28. WE HAVE HEARD BOTH THE PARTIES. MR. SOPARKAR IS V ERY FAIR IN POINTING OUT AT THE OUTSET THAT THIS TRIBUNAL'S DECISION IN ASSTT. CIT V. LIVA HEALTHCARE LTD. [2016] 161 ITD 63/73 TAXMANN.COM 171 (MUM. - T RIB.) UPHOLDING SUCH A DISALLOWANCE IN CASE OF PHARMACEUTICAL COMPANIES OF FERING FREE SAMPLES TO DOCTOR POST INTRODUCTION OF THE RELEVANT PRODUCT IN MARKET AFTER ESTABLISHING END USE; IS HIT BY SECTION 37(1) EXPLANATION. HE HO WEVER REFERS TO ANOTHER CO- ORDINATE BENCH DECISION IN MACLEODS PHARMACEUTICALS LTD. V. ADDL. CIT [2016] 161 ITD 291/74 TAXMANN.COM 250 (MUM. - T RIB.) HOLDING THAT THE ITA NOS. 2380-AHD-2015, 3327-AHD-2016, 181 1 & 1812-AHD-2017 LA RENON HEALTHCARE PVT. LTD. ASST. YEARS 2011-12, 2012-13, 2013-14 & 2014-15 - 13 - ABOVE BOARD'S CIRCULAR DATED 01.08.2012 WOULD NOT H AVE ANY RETROSPECTIVE EFFECT SINCE NOT OPERATING IN ASSESSMENT YEARS 2010 -11. HE FURTHER QUOTES ANOTHER CO-ORDINATE BENCH DECISION IN DY. CIT V. PH L PHARMA (P.) LTD. [2017] 163 ITD 10/78 TAXMANN.COM 36 (MUM. - TR IB.) DISTINGUISHING THE ABOVE CASE LAW IN REVENUE'S FAVOUR WHILST DELETING AN IDENTICAL DISALLOWANCE ON THE GROUND THAT SUCH BUSINESS PROMOTION EXPENSES ARE ALLOWABLE AS BUSINESS EXPENDITURE NOT HIT U/S. 37(1) EXPLANATION . WE AFFORDED AMPLE REBUTTAL OPPORTUNITY TO THE REVENUE. LEARNED DEPART MENTAL REPRESENTATIVE FAILS TO INDICATE ANY DISTINGUISHING FEATURES THERE IN. WE FIND THAT THE ABOVE LATTER CO-ORDINATE BENCH HAS ELABORATELY DISCUSSED ALL CASE LAWS, IMC REGULATIONS AS WELL AS BOARD'S CIRCULAR IN DECIDING THE ISSUE. WE THEREFORE ADOPT THE VERY REASONING HEREIN AS WELL TO DELETE T HE IMPUGNED DISALLOWANCE. THE ASSESSEE SUCCEEDS IN ITS INSTANT SUBSTANTIVE GR OUND. ITS APPEAL ITA NO.848/AHD/2016 IS PARTLY ACCEPTED. WE HAVE ALSO CAREFULLY CONSIDERED THE JUDGMENT PASS ED BY THE DCIT- VS-ESAOTE INDIA (NS) LTD. THE RELEVANT PORTION WHER EOF IS AS FOLLOWS: BUSINESS DISALLOWANCE - ALLOWABILITY OF (SALES PRO MOTION EXPENSES) - ASSESSMENT YEAR 2012-13 - ASSESSEE COMPANY HAD SUPP LIED CERTAIN PRODUCTS FREE OF COST TO GOVERNMENT HOSPITALS AND OTHER HOSP ITALS IN PURSUANCE OF PURCHASE ORDER PLACED BY SUCH HOSPITALS AND CLAIMED SAME AS DEDUCTION UNDER HEAD 'SALES PROMOTION EXPENSES' - ASSESSING O FFICER WAS OF VIEW THAT GOODS SUPPLIED TO DOCTORS AND OTHER PROFESSIONAL AS SOCIATION FREE OF COST WERE PROHIBITED IN TERMS OF CBDT CIRCULAR NO. 5/2012 DAT ED 1-8-2012; THUS, DISALLOWED EXPENSES CLAIMED BY ASSESSEE - WHETHER C BDT CIRCULAR NO. 5/2012 DATED 1-8-2012 IS PROSPECTIVE IN NATURE AND, THUS, NOT APPLICABLE TO CASE OF ASSESSEE - HELD, YES - WHETHER, FURTHER, SINCE GOOD S WERE SUPPLIED TO HOSPITALS IN PURSUANCE TO PURCHASE ORDER, IT COULD NOT BE CON CLUDED THAT PRODUCTS WERE SUPPLIED FREE OF COST; THUS, CLAIM OF ASSESSEE OF E XPENDITURE UNDER HEAD SALES PROMOTION EXPENSES WAS TO BE ALLOWED - HELD, YES [P ARA 10] [IN FAVOUR OF ASSESSEE] TAKING INTO CONSIDERATION THE ENTIRE ASPECT OF THE MATTER, WE ARE OF THE CONSIDERED OPINION THAT THE PROFESSIONAL FEES PAID TO THE DOCTORS TO THE TUNE OF RS.2,29,16,147/- IS NOT IN VIOLATION OF EITHER MCI GUIDELINES OR CBDT CIRCULAR AS DISCUSSED ABOVE AND HENCE THE SAME IS ALLOWABLE BUSINESS EXPENDITURE U/S 37(1) OF THE ACT WHICH HAS BEEN TAKEN INTO CONSIDER ATION IN ITS PROPER PROSPECTIVE BY THE LEARNED CIT(A). THUS THIS COURT DOES NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY THE LEARNED CIT(A), SO AS TO WARRANT INTERFERENCE. THE ITA NOS. 2380-AHD-2015, 3327-AHD-2016, 181 1 & 1812-AHD-2017 LA RENON HEALTHCARE PVT. LTD. ASST. YEARS 2011-12, 2012-13, 2013-14 & 2014-15 - 14 - QUESTION IS ACCORDINGLY ANSWERED IN THE AFFIRMATIVE , I.E. IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. CONSEQUENTLY, APP EAL FAILS AND IS ACCORDINGLY DISMISSED. 6. IN THE RESULT, ALL THE REVENUES APPEALS ARE DIS MISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON 23/09/2019 SD/- SD/- ( PRAMOD KUMAR) ( MS. MADHUMITA ROY ) VICE PRESIDENT JUDICIAL MEMBER AHMEDABAD; DATED 23/09/2019 PRITIYADAV, SR.PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. () / THE CIT(A)-2, AHMEDABAD. 5. , ! ', #$%% / DR, ITAT, AHMEDABAD 6. &' () / GUARD FILE. / BY ORDER, //TRUE COPY// / (DY./ASSTT.REGISTRAR) !, #$ / ITAT, AHMEDABAD 1. DATE OF DICTATION 30.08.2019 (DICTATION PAGES 9) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 03.08.2019 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S 18.09.2019 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S. 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER