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2018 (8) TMI 1183 - AT - Income TaxDisallowance u/s.40(a)(ia) for failure to deduct TDS - assessee in default u/s 201 - disallowance of expenses u/s.37 on account of infringement of the law - AO was of the view that the gift given by pharmaceutical and allied health sector industries to medical practitioners and their professional association is prohibited under the Medical Council Act, 1956 - Held that:- no disallowance needs to be made if the recipient has included the payment made by the assessee in its receipts and has paid the taxes thereon. - the claim of the assessee for the interest expenses cannot be denied due to non deduction of TDS under section 194A r.w.s.40(a)(ia) of the Act. - the claim of the assessee for the interest expenses cannot be denied due to non deduction of TDS under section 194A r.w.s.40(a)(ia) of the Act. - Decided against the revenue. Sale promotion expenses - Held that:- CIT(A) reversed the order of AO by observing that the assessee is not a pharmaceutical company. Therefore, the Circular issued by CBDT cannot be applied. The ld. CIT(A) also observed that the assessee had not supplied any item free of cost to the hospitals, but these items were representing part of the machinery and equipments supplied to various parties. - order of CIT(A) confirmed - Decided against the revenue.
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