9911796707
TMI Blog2016 (12) TMI 1611X X X X Extracts X X X X X X X X Extracts X X X X ..... nature prohibited by Indian Medical Council & this expenditure was not allowable from 10.12.2009 itself. The said finding is illegal and unjustified. 2. That learned CIT (Appeals) has erred in holding that a sum of Rs. 6,86,333/- debited under the head "sales and business promotion expenses" and Rs. 1500/- debited under the head "advertisement expenses" is disallowable based on Explanation to section 37 itself and confirming the disallowance of Rs. 6,87,833/- made by the Assessing Officer. The disallowance confirmed is illegal, unjustified and excessive. 3. That the learned CIT (Appeal) has erred in relying on the CBDT Circular No. 5/2012 to confirm the disallowance of the above mentioned expenses. The said action is illegal and unjusti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the bar is on the medical professional but not on the pharmaceutical companies. The ld. Counsel submitted that the expenditure is allowable under section 37(1) of the Act. 3.1. On the contrary, the ld. D/R supported the orders of the authorities below. He submitted that any expenditure which is prohibited by law would not be allowable as deduction. 3.2. We have heard rival contentions, perused the material available on record and gone through the orders of the authorities below. As per section 37(1), any expenditure not being expenditure of the nature described in sections 30 to 36 and not being in the nature of capital expenditure or personal expenses of the assessee laid out or expended wholly or exclusively for the purposes of busine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s M/s. Jawa Laboratories. The assessee was required to demonstrate that these expenditures are made for the promotion of business or otherwise related to business. In the absence of such material, in our considered view, such expenses cannot be allowed. We find that the disallowance is made by the AO on the ground that such expenditure is not allowable in view of Circular No. 5 of 2012 of CBDT. The ld. Counsel for the assessee has placed reliance on the decision of Hon'ble Punjab & Haryana High Court rendered in the case of CIT vs. KAP Scan and Diagnostic Centre P. Ltd., 344 ITR 476 (P&H). In that case the assessee had made payment of commission to the private doctors for referring business for diagnosis. In the case in hand there is no mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO has not specified any specific bill which is of personal nature as observed by the ld. CIT (A). The expenses are incurred by the employees/medical representatives of the assessee for meeting the dealers. He submitted that there is no personal element involved in these expenses. 4.2. The ld. D/R has supported the orders of the authorities below. 4.3. We have heard rival contentions, perused the material available on record and gone through the orders of the authorities below. We find that the expenses are disallowed on the basis that the personal element in such expenses cannot be denied. We find that the AO has not demonstrated as to how the personal element is involved in these expenses. Therefore, the action of the ld. CIT (A) co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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