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2018 (1) TMI 1033 - AT - Income TaxTPA - AMP expenses compensation - whether AE and the assessee had to share AMP expenses? - Held that:- We find that the TPO had held that assessee should have been compensated by its AE for the AMP expenditure incurred by it. We have gone through the agreements entered in to by the AE's with the assessee, that in the agreements there is no condition about sharing of AMP, that the agreements talks of using best efforts to market and distribute the product or promote the products in a commercially reasonable manner. These terms do not give any indication that the AE and the assessee had to share AMP expenses. Secondly, if the AE was benefited indirectly by the AMP expenditure incurred by the assessee, it cannot be held that it had entered into agreement for sharing AMP expenses. We are also of the opinion that Bright Line Method should not have been applied by the TPO. See Thomas Cook(2016 (7) TMI 318 - ITAT MUMBAI) - Decided in favour of assessee Depreciation on plant and machinery and building - addition on the basis of discontinuity of manufacturing operation of the assessee and also holding that the same have not been used during the year - Held that:- The issue stands covered by the earlier orders of the Tribunal [2017 (6) TMI 334 - ITAT AHMEDABAD] wherein held With the introduction of concept of WDV of block of assets, the depreciation is allowable not on individual items but depending upon date of acquisition and put to use of the asset. Also section 38(2) deals with usage of assets for non-business purposes and does not refer to assets partly used during the year for business purposes. Depreciation is allowable on the plant and machinery, building, furniture and fixture and office equipment - Decided in favour of assessee Disallowance of payment made to doctors - Held that:- MCI guidelines are applicable to the professionals i. e. Doctors only. They do not and cannot govern the other tax entities like Drug manufacturing or drug distributing Companies or individuals other than the doctors, or HUF's or Firms etc. MCI, as a body can formulate policy for the Doctors. The assessee is not a practicing professional. So, any guidelines issued by it cannot decide the allowability or otherwise of an expenditure under the Act. Income tax Act is a code in itself and business income an assessee has to be assessed and taxed as envisaged by the provisions of the Act. The AO/DRP had not doubted incurring of expenditure. They have heavily relied upon the guidelines issued by the MCI for the doctors. As in the case of MAX Hospital, Pitampura (2014 (1) TMI 1829 - DELHI HIGH COURT) has clearly held that MCI could issue guide lines for the Doctors only and that the MCI in its affidavit admitted that it has ‘no jurisdiction’ to pass any order against the ‘Petitioner hospital’. Ethics Committee of MCI is authorised to pass some order about the infrastructure of any hospital. But, as far as corporate entities are concerned MCI cannot issue any guide lines. Therefore, we are not dealing with the issue as to from which AY. the guide lines would be applicable. We would also like to hold that distribution of free samples cannot be treated as violation of Expl. 1 to section 37(1).- Decided in favour of assessee
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