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2022 (1) TMI 740 - BOMBAY HIGH COURTDisallowance of expenses u/s 37(1) - Pharmaceutical Companies - proportionate expenditure incurred on medical practitioners - Disallowance in view of Circular No.5 of 2012 as well as regulations framed by the Medical Council of India - applicability of the Medical Council of India Regulations dated 10.12.2009 and the C.B.D.T. Circular No.5 of 2012 to pharmaceutical companies like the assessee - ITAT deleted the addition - HELD THAT:- In the present case, the Assessment Year is 2010-11. If it is found that the Circular cannot be given retrospective effect it would not be necessary to then go into the question of its applicability to pharmaceutical companies from 01.08.2012 onwards. It is seen that the Tribunal through its various benches has consistently held that C.B.D.T. Circular No.5 of 2012 would not have any retrospective effect but would operate prospectively from 01.08.2012. C.B.D.T. Circular No.5 of 2012 which creates a burden or liability or imposes a new kind of imparity has thus to be applied prospectively, reliance has been placed by the Tribunal on the decision of SRMB Dairy Farming Pvt. Ltd. [2017 (11) TMI 1494 - SUPREME COURT] It has been held therein that while beneficial circulars have to be applied retrospectively, oppressive circulars would have prospective application. In view of this it is clear that C.B.D.T. Circular No.5 of 2012 imposes a new kind of imparity and thus the view taken in the aforesaid decisions by the Tribunal is in consonance with the law laid down by the Hon’ble Supreme Court. It is thus clear that the said Circular could not have been applied retrospectively and especially to Assessment Year 2010-11 in the present case. On this count it is not necessary to interfere with the impugned order passed by the Tribunal in this appeal. Substantial question of law no.(i) is answered accordingly by holding that the Tribunal was justified in deleting the dis-allowance as made by the Commissioner of Income Tax (Appeals).
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