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2022 (8) TMI 129 - AT - Income TaxDisallowance of business promotion expenses u/s 37(1) - expenses incurred for the benefit of Doctors/medical practitioner - AO was of the view that above expenditures were incurred in violation of Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulation 2002 and thus, the same needs to be disallowed as per the CBDT Circular No. 5/2012 dated 01-08-2012 - CIT-A deleted the addition - HELD THAT:- We find that the issue of business promotion expenses incurred for the benefit of Doctors/medical practitioner came before this tribunal in the own case of the assessee [2019 (10) TMI 731 - ITAT AHMEDABAD] if the nature of this expenditure is being viewed with angle of commercial organization, then it would reveal that these were essential expenditure for the purpose of a pharmaceutical industry. The only caveat for their non-disallowance is Explanation 1 appended to section 37, which is applicable on the expenditure which are incurred for infringement of any law. Before us, Revenue has not placed any material on record to point out any distinguishing feature in the facts of the case for the year under consideration and that of earlier years nor has placed any contrary binding decision in its support. Therefore, respectfully following the same, we uphold the finding of the learned CIT-A and hereby dismissed the ground of appeal raised by the Revenue. Deduction claimed u/s 80IC - whether the research and development expenses incurred by the assessee should be allocated to eligible unit while working out the deduction under section 80-IC? - HELD THAT:- This question has been answered by the judgment of the Hon’ble Gujarat High Court in the case of the CIT Vs. Torrent Pharmaceuticals Ltd [2016 (7) TMI 1301 - GUJARAT HIGH COURT] wherein it was held that the R and D expenses should not be allocated to the units eligible for deduction under section 80-IA. Revenue in the own case of the assessee for the assessment year 2010-11 in the assessment framed under section 143(3) of the Act has not allocated the research and development expenses to the eligible unit for the purpose of computing the deduction under section 80-IC of the Act. Admittedly, there is no change in the facts and circumstances of the year under consideration viz a viz the earlier assessment year i.e. 2010-11, thus we are of the view that the principles of consistency should be adopted. Thus we hold that the research and development expenses are not to be allocated to the eligible undertaking while calculating the deduction of the assessee under the provisions of section 80 IC. Additional claim u/s 35(2AB) on account of clinical trial expenses incurred outside the approved facility - HELD THAT:- We find that the issue of allowability of weighted deduction under 35(2AB) on clinical trial expenses incurred outside approved facility came before this tribunal in own case of the assessee [2020 (3) TMI 333 - ITAT AHMEDABAD] decided in favour of assessee. Before us, no material has been placed on record by the Revenue to demonstrate that the decision of Tribunal as discussed above has been set aside / stayed or overruled by the higher Judicial Authorities. Before us, Revenue has not placed any material on record to point out any distinguishing feature in the facts of the case for the year under consideration and that of earlier year nor has placed any contrary binding decision in its support. Therefore, respectfully following the same we uphold the finding of the learned CIT-A and hereby dismissed the ground of appeal raised by the Revenue.
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