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2015 (10) TMI 249 - AT - Income TaxExpenditure incurred towards the drugs consumed for quality control disallowed - Held that:- On evidence put forth by the assessee-company, the Assessing Officer is not justified in making observation that the assessee was not required to act as a drug/medicine testing agency. The Assessing Officer has to verify the evidence produced by the assessee and find out whether the assessee has acted as a testing agency or not. It is not for the Assessing Officer to comment that the assessee was not required to act as a drug/medicine testing agency. Since the material available on record clearly suggest that the assessee has tested the quality of drugs procured, this Tribunal is of the considered opinion that the expenditure incurred by the assessee towards the drugs consumed for quality control has to be allowed as expenditure. Expenditure on damaged drugs and unusable drugs - Held that:- This Tribunal is of the considered opinion that the Assessing Officer has to examine the matter afresh after considering the necessary material that may be filed by the assessee to support the claim of damaged drugs, unusable drugs and drugs consumed for quality control. In other words, the assessee has to produce necessary details with regard to damaged drugs, unusable drugs and drugs consumed for quality control, liquidated damages, if any, claimed from the respective companies for the damaged and unusable drugs. In view of the above discussion, the orders of the lower authorities are set aside and the entire claim of damaged drugs, unusable drugs and drugs consumed for quality control is remitted back to the file of the Assessing Officer. The Assessing Officer shall re-examine the matte afresh in the light of the material/details that may be filed by the assessee with regard to damaged drugs, unusable drugs and drugs consumed for quality control and thereafter decide the same in accordance with law after giving a reasonable opportunity to the assessee. Cost of blood pressure checking apparatus said to be supplied to the members of the State Legislative Assembly - Held that:- This Tribunal is of the considered opinion that the cost of blood pressure checking apparatus cannot be considered to be a marketing expense. The assessee-company was expected to procure the drugs, medicines, equipments etc. and supply the same to the Government Hospitals. Supply of any machinery or equipment including blood pressure checking apparatus to the members of the State Legislative Assembly or to any of the Officers of the Government, in their individual capacity cannot be considered as marketing expenses, therefore, this Tribunal is of the considered opinion that the expenditure of ₹ 6,45,741/- cannot be allowed as customer care expenses for the assessment year 2010-11. Accordingly, the order of the CIT(A) on this issue for assessment year 2010-11 is set aside and that of the Assessing Officer is restored. - Appeal Decided partly in favour of assessee for statistical purposes.
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