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2019 (1) TMI 210 - AT - Income TaxDisallowance on account of Physician Samples distributed free of cost - allowable business expenditure u/s 37 - Held that:- As decided in assessee's own case it is a known fact that the free sample of medicines supplied to the doctors is done for the promotion of the product of the company. Even when a new product is launched, the doctors are given necessary inputs regarding the use and effects etc. of the product and which also contributes imparting knowledge to the doctors about the new medicine/product coming into the relevant for practice of their profession. The genuineness of the transactions has not been doubted by the A.O. We do not find any infirmity in the well reasoned order passed by the CIT(A) holding that the expenses were incurred for the business promotion activity of the assessee. We therefore do not find any merit in the appeal filed by the Revenue Disallowance on account of Sponsorship of Doctor’s Overseas Tours - Held that:- As the appellant has been able to prove the genuineness of expense, proper recording in its books of accounts of the expenses, and the relationship of the expense with the business of the appellant, I find there is no need to make the said disallowance simply because in some other case, a disallowance made had been upheld. The case laws relied by the appellant also helps its case. The addition made is, therefore, deleted and the ground of appeal allowed. Disallowance of Sales promotion - busniss expenditure - Held that:- In the instant case, the expenditure incurred is not capital in nature or in the nature of personal expenses of the appellant. In fact, it has been incurred on account of commercial expediency and has facilitated the appellant in carrying on its business. A perusal of the accounts of the earlier years shows that the total turnover and net profit of the appellant company have been increasing over the years which shows that the sales promotion activities have led to higher sales and better financial results for the company. Considering the discussion the expenditure claimed by the appellant was entitled to deduction u/s. 37(1) Exemptions u/s. 54EC against deemed Short Term Capital allowability - Held that:- In CIT vs. Aditya Medisales [2013 (11) TMI 576 - GUJARAT HIGH COURT] assessee transferred an asset held by it for more than 36 months i.e. a long term capital asset and invested an amount of ₹ 50 lakhs in bonds issued by NHAI which is long term specified asset as per clause (b) sub clause (i) of the explanation to section 54EC. In the above said case, in similar circumstances, Hon’ble Gujarat High court granted relief in favour of the assessee. Therefore, in such circumstances, we do not want to interfere in the order passed by the ld. CIT(A). In our considered opinion, ld. CIT(A) has passed detailed and reasoned order and same does not require any kind of interference at our end. - Revenue appeal dismissed.
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