TMI Blog2010 (7) TMI 527X X X X Extracts X X X X X X X X Extracts X X X X ..... they have promoted the sales by convincing other professionals but also made them aware about the product hence in a way created a better market for future - The assessee has explained that since the assessee is in trading of Ophthalmic and Orthopaedic equipments, therefore, the expenditure incurred was wholly and exclusively for the purpose of business, hence, allowable u/s 37 of the Income-tax Act, 1961 - The assessee has established the genuineness of the expenditure, plus demonstrated its connectivity of the business of the assessee - The revenue has wrongly appreciated the facts of the case, therefore, their view is hereby reversed and we accordingly direct to allow the claim of the expenditure - Hence, the appeal of the assessee is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l 2,78,460 2.1 In compliance of show-cause notice, the assessee has furnished the reasons and the factual background of the expenditure incurred on the said two Doctors as per the following submissions:- "(a) Dr. Maulik Patwa Rs. 7500-on course registration fees and travelling expenses of Rs. 42,000......... The company has incurred the expenses of Rs. 7500 on registration of Association of orthopaedic course (AO Course) held at Mathys, Germany and travelling charges of Rs. 42,000 for attending the said course by Dr. Maulik Patwa. The object of AO course was to educate the doctors on different orthopaedic products of the principal company [Mathys Medical (P.) Ltd., New Delhi] for whom the assessee is working as d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to deal within the course of the business and sought the business in the subsequent year too. The main consideration of sponsoring the trip was a part of the process of profit making and therefore, no disallowance be made as proposed by your honour. Dr. Vishnu Patel (Ophthalmic Surgeon) During the year under assessment the company has incurred Rs. 2,28,960 on the foreign trip of Dr. Vishnu Patel who is one of the senior and known ophthalmic surgeon of Gujarat. As stated in our reply of 7th July, 2006 that to promote the sales of the company, assessee has to incur the expenditure on sponsorship of different programme and seminar on different occasions, as the doctors are the major role player in the profit earning process of the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ophthalmic/orthopaedic instruments and also a distributor of surgical equipments, therefore, a business decision was taken to ask one of the doctor, viz., Dr. Maulik Patwa an orthopaedic to attend an orthopaedic course at Germany. The purpose was to educate the doctor in respect of different Orthopeadic products of the principal company. Likewise in respect of the expenditure incurred on Dr. Vishnu Patel, an Ophthalmic surgeon, the assessee company had made his sponsorship to foreign trip to attend the seminars. As far as the question of the details of the expenditure, supporting evidence, such as, vouchers/bills, etc. are concerned, it is an admitted factual position that the Assessing Officer has not raised any doubt about the actual inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expenditure was admissible in the eyes of law? In this regard, there was a reference of Explanation annexed to section 37(1) of the Income-tax Act, 1961 through which the statute has prohibited any expenditure incurred by a business concern which was otherwise prohibited by law. The answer to this question was that the two doctors were not Government employees, hence, being not a Government servant, hence there was no question of an illegal gratification. Both the doctors were independent medical professionals and the expenditure incurred on them had directly connected with the business of the assessee which had sprang up on incurring the expenditure, hence, nothing but incidental and beneficial to the business activity of the assessee. It ..... X X X X Extracts X X X X X X X X Extracts X X X X
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