Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2023 (3) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (3) TMI 551 - AT - Income TaxDisallowance of free samples - Allowable business expenditure - CIT(A) observed that due to failure on the part of the assessee in providing list of the name and address of the recipient of free samples/products before the Assessing Officer, he made disallowance for 50% of the total expenses - HELD THAT:- As the contention of the assessee that this expenditure was for the purpose of its business, is not accepted as the distributing of free samples to healthcare personnel is prohibited. In view of provisions of reproduce above, we do not find any error in the order of the Ld. CIT(A) in upholding the disallowance made by the Assessing Officer following the ratio in the case of M/s Apex Laboratories Pvt. Ltd. [2022 (2) TMI 1114 - SUPREME COURT] Disallowance of expenses on account of organizing conference and seminars for the doctors and healthcare professionals - HELD THAT:- For disallowance of conference and seminars expenses, though the assessee has contested that same is a part of research and development activity which aids the assessee to gain knowledge, remain updated of development of related fields, and enables the assessee to innovate and improve products line, however, we find that the Hon’ble Supreme Court in the case of Apex Laboratories [2022 (2) TMI 1114 - SUPREME COURT] has also considered the expenses on conference as disallowable in the form of freebies given to the healthcare practitioner/medical practitioners. In the instant case, the assessee has not supplied any name and address of the healthcare personnel, to whom the conference or travel expenses have been reimbursed. The section 4 of the Infant Milk Substitutes, Feeding Bottles and Infant Foods (Regulation of Production, Supply and Distribution) Act, 1992, strictly prohibit offer of inducement of any other kind for the purpose of promoting the use or sale of the infant milk substitutes or infant foods for taking part in promoting of the infant milk substitutes, feeding bottles and infant foods. Therefore, though the assessee is claiming that the expenses on conference and seminars were for his business, however, same falls under prohibited activity and therefore, expenses incurred thereon have been validly disallowed of the Assessing Officer and confirmed by the Ld. CIT(A) invoking Explanation to section 37(1) of the Act, following Hon’ble Supreme Court in Apex Laboratories Ltd. (supra). As far as the grievance of the assessee regarding the comment the Ld. CIT(A) we are of the opinion that the said comments without providing opportunity of being heard are not justified. To levy penalty or filing prosecution for violation of provisions of the Infant Milk Substitutes, Feeding Bottles and Infant Foods (Regulation of Production, Supply and Distribution) Act, 1992, is within the domain of the relevant authority under said Act, following due procedure of law and Ld CIT(A) was not required to express his conclusion in said matters, that too without providing any opportunity of being heard. However, we also note the recognized principle of Criminal Jurisprudence that anyone can set or put the criminal law into motion except where the statue enacting or creating offence indicate to the contrary. We accordingly restore this matter back to ld CIT (A) for considering evidence on record and after providing due opportunity of being heard, express his opinion, if so, required in the matter. Appeal of the assessee is allowed partly for statistical purpose.
|