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2022 (6) TMI 739 - AT - Income TaxAllowability of Professional promotion charges - Expenses incurred by Hospitals towards patients referred to hospital by doctors/villagers/RMP’s etc. - Addition in view of the provisions of the Section 37 - The expenses are incurred by the assesee are in nature of referral cases, investigation charges or reimbursement of the cost incurred to the persons for bringing the patients to the hospital - HELD THAT:- We are of the opinion that AO has not doubted the genuineness of the expenditure incurred by the assessee as referral charges but the disallowance was made by the AO only on the ground that the said expenditure is hit by the explanation to Section 37(1) being prohibited. When the genuineness of the expenditure is not doubted then the claim of the assessee cannot be disallowed. We are of the view that the AO has wrongly interpreted the CBDT circular. No 05/2012 dated 01/08/2012. The Ld. AR for assessee submitted that the circular is not applicable for the present case, it is applicable for expenditure incurred in providing freebies to medical practitioner by pharmaceuticals and allied sector health industry. We are of the considered view that the CIT(A) has rightly upheld the order by relying on the identical issue decided in Hon’ble Rajasthan High Court [2017 (12) TMI 931 - RAJASTHAN HIGH COURT] . The Commissioner of Income Tax (Appeals) after considering the relevant facts has rightly held that the expenses claimed by the assessee is allowable u/s.37(1) of the Income Tax Act, 1961. Thus, we do not find any merit in the case of the Revenue.
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