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 1339 - AT - Income TaxExpenses by pharma companies - expenditure incurred towards freebies to doctors by the Pharma Agencies as disallowable u/s.37(1) - expenditure made towards selling and marketing as well as travelling and conveyance as held to be in contravention of the Circular No.5/2012 issued by the CBDT - HELD THAT:- After hearing both the parties, we are of the opinion that this issue required to be re-examined by the AO in the light of the earlier order of the Tribunal in the assessee’s own case [2023 (3) TMI 1299 - ITAT BENGALURU] wherein held A.O. has not critically examined the nature of expenditure incurred by the assessee. In the larger interest of justice, in view of the latest judgment of the Hon’ble Apex Court, which has examined the very same issue, it becomes necessary to examine the exact nature of expenses incurred by the assessee for Doctors from all angles. Therefore, for substantial question and cause, the additional evidence are taken on record. Since the additional evidence is taken on record, necessarily, the matter needs fresh verification by the A.O. especially in the light of the recent judgment of the Hon’ble Supreme Court in the case of M/s.Apex Laboratories Pvt. Ltd. v. DCIT [2022 (2) TMI 1114 - SUPREME COURT] Deduction u/s 80G - donation made to TATA Memorial Hospital while determining the taxable income - HELD THAT:- We are of the opinion that the AO has to examine the receipt issued by Tata Memorial Hospital and if that assessee duly approved u/s 80 G of the Act, the exemption u/s 80G of the Act is to be granted to the assessee. TP Adjustment - comparable selection - HELD THAT:- ITDC Limited - In our opinion, it is appropriate to remit the issue to the file of AO/TPO to consider the order of the Tribunal in the case of Funda R&D India Pvt. Ltd. [2022 (1) TMI 1045 - ITAT DELHI] we find it difficult to accept the observation of Ld. DRP that because it is a Govt. company, it is not a good comparable. For such years also the ITDC was a Government owned company and no change of facts and circumstances is brought to our notice. We, accordingly hold it to be a good comparable and direct the ld TPO/ AO to include it in the final list of comparable to bench mark the international transactions. Concept Public Relations has been included by the TPO, however, it has been excluded by the Ld. DRP without giving any notice to the assessee, which is incorrect. Accordingly, we vacate this findings of the Ld. DRP. Exclusion of BVG India Ltd. as it won’t satisfy the filter adopted by the TPO - The contention of the ld AR is that it has been excluded in assessment year 2012-13 on same principle by ld DRP and it has to be excluded in this assessment year also. In our opinion, in this assessment, the FAR analysis is to be done and it has to be seen if the FAR analysis is to be done in assessment year if it is same in assessment year 2012-13, it should be excluded from the list of comparables. Accordingly, the issue is remitted to the file of AO/TPO for our consideration. Determining the operating margin of the comparable company 'I C R A Management Consulting Services Ltd' as 5.10% on operating cost vis-a-vis 4.31% on operating cost as per the Appellant - We remit this issue to the file of AO/TPO to ascertain the correct margin in case of ICRA Management & Consulting Services Pvt. Ltd. and decide accordingly. International transaction relating to recovery of expenses is not at arm's length by regarding the same as the administrative support services and thereby making an adjustment - We remit this issue to the file of AO/TPO to examine this issue in the light of above order of the Tribunal.
|