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2019 (5) TMI 27 - AT - Income TaxAddition u/s 37 - expenses on account of business promotion - Allowable business expenditure - assessee is admittedly engaged in the business of trading and marketing of medicines - Authorities below, rejected the claim of assessee company considering that assessee company has provided freebies to the Medical Practitioners and referred to the provisions contained under Indian Medical Council (Professional Conduct Etiquette and Ethics) Regulations, 2002 and also referred to CBDT Circular No.5/2012, Dated 01.08.2012 - HELD THAT:- The said Circular have been considered by the ITAT, Mumbai Bench in the case of DCIT-8(2), Mumbai vs. PHL Pharma (P.) Ltd., [2017 (1) TMI 771 - ITAT MUMBAI] in which it was clearly held that said Regulations and Board Circular are not applicable to Pharma and allied Health Care Companies. Therefore, there is no question of application of Section 37(1) of the I.T. Act. Thus whatever expenses incurred by the assessee company are only on account of business promotion expenses which are allowable under the provisions of the I.T. Act. The authorities below have failed to provide as to what offence have been committed by the assessee company on incurring such expenses under any Law. There is no question of applying Explanation to Section 37(1) of the I.T. Act, 1961, against the assessee company. We, accordingly, set aside the Orders of the authorities below and delete the entire addition. - Decided in favour of assessee.
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