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2021 (2) TMI 725 - AT - Income TaxDisallowance of business promotion expenses - expenditure incurred by the assessee on doctors - expenses on cath lab, marketing, travel of staff, paramedicines etcwhat is the cut off date of disallowance of expenses relating to doctors, whether it is 01.08.2012 or 14.12.2009 - HELD THAT:- As decided in PHL case (2017 (1) TMI 771 - ITAT MUMBAI) had held that expenditure incurred on doctor before 01.08.2012 be allowed as revenue expenditure. CBDT Circular No.5/2012 dated 01.08.2012, clearly states that any expense incurred in violation of MCI Regulations dated 10.12.2009, is inadmissible u/s 37(1) of the I.T.Act w.e.f. 01.08.2012 (i.e. prospectively). Thus we hold that expenditure relating to doctors incurred by the assessee prior to 01.08.2012 need to be allowed as revenue expenditure. Since we are concerned with A.Y’s 2007-2008 to 2011-2012, the CBDT Circular No.5/2012 dated 01.08.2012 does not have effect on these cases. Accordingly, we direct the A.O. to delete the disallowance of business promotion expenses in A.Y. 2007-2008 to 2011- 2012. Hence ground is allowed. Disallowance of discount to customers - HELD THAT:- In light of the ITAT order dated 29.01.2018 for A.Y’s 2012- 2013 and 2013-2014, [2018 (1) TMI 1623 - ITAT BANGALORE]we restore the issue of discount given to customer, to A.O. for de novo consideration with following directions, namely - (a) Discounts given in the invoice itself should be allowed without making any further enquiry; and (b) Discounts given to hospitals may be allowed after making enquiry. Disallowance of bad debts u/s 36 - HELD THAT:- Revenue has not established that conditions stipulated u/s 36(2) of the I.T.Act was not fulfilled with respect to any of the debts which were written off by the assessee during the previous years. Under these circumstances, we are of the view that disallowance made by the Revenue authorities is incorrect as the assessee is only required to write off the bad debts and is not required to establish that it has become really bad. Accordingly, we direct the A.O. to allow the claim of bad debt raised by the assessee.
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