TMI Blog2019 (6) TMI 471X X X X Extracts X X X X X X X X Extracts X X X X ..... ent and training expenses - HELD THAT:- No asset was created by incurring expenditure on recruitment and training and, therefore, there was no reason for treating this expenditure as capital expenditure. The finding of the Assessing Officer has not been found by the Ld. CIT-A in accordance with accounting principles. He also found the disallowance made by the Assessing Officer against the principle of consistency. Disallowance of conference expense - HELD THAT:- Expenditures have been incurred towards convention expenses, education support expenses, seminar sponsorship fees, symposium/ workshop expenses. We find that this issue, on similar factual matrix is covered by the order of the Tribunal for AY 2011-12. The Tribunal has concluded the matter in assessee s favor by following the judgment of this Tribunal rendered in India Medtronics Pvt. Ltd [ 2018 (1) TMI 1033 - ITAT MUMBAI]. Since nothing on record suggest any change in nature of expenditure, respectfully following the binding judicial pronouncements, we delete the impugned additions. This ground stands allowed. TP Adjustment - Advertisement, Marketing and Promotion ('AMP') expenses - HELD THAT:- We concur wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ursuant to directions of Ld. Dispute Resolution Panel-I, Mumbai (DRP) u/s. 144C (5) dated 13/12/2016. The income of the assessee has been determined at ₹ 2320.41 Lacs after certain additions, disallowances TP adjustments as against returned income of ₹ 190.29 Lacs e-filed by the assessee on 28/11/2011. 3. The Ld. Authorised Representative for the assessee [AR], Shri M.P.Lohia , at the outset, submitted that all the issues under appeal are covered by the earlier orders of the Tribunal in assessee s own case which is evident from the fact that early hearing was granted to the assessee vide order sheet entry dated 27/07/2018. The said facts were confronted to Ld. CIT-DR who could not rebut the same. The details for Tribunal s order, for ease of reference, could be tabulated in the following manner: - No. ITA No. Order Dated AYs 1. ITA Nos.6005,6006,5807/Del/2013 31/03/2017 2007-08 2008-09 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of ₹ 8.15 Crores was worked out and added to the income of the assessee. The Ld. DRP, following directions in AYs 2007-08 to 2011-12, upheld the same. 4.2 We find that this issue is covered by the cited order of Tribunal for AYs 2007-08 2008-09, wherein the matter has been concluded in the following manner: - 4.3.5 In such circumstances, we are of considered opinion that the amount of ₹ 50,33,418/- treating loaner sets expenditure as capital expenditure was not in accordance with law and therefore, directed to be deleted. Thus, the grounds No.1 and 2 of the appeal are accordingly allowed. This decision has been followed by the Tribunal in AYs 2009-10 2011-12. Since nothing on record suggest any change in material facts or circumstances, respectfully following the consistent view of Tribunal, we delete the impugned additions of ₹ 8.15 Crores. The Ld. AO is directed to recompute the same in terms of our above directions. The grounds of appeal stand allowed. 5.1 The next Ground reads as under: - Disallowance of 50% of advertisement and sales promotion e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . We find that neither the Assessing Officer nor the Ld. CIT-A has disputed the genuineness of the expenditure. In such circumstances, once the genuineness of the expenditure is not in dispute, the commercial expediency cannot be rejected on the ground of suspicion. No material was led by the revenue to allege that the expenditure incurred in the course of business is not an eligible expenditure. We accept the contention of the Ld. counsel that it is not possible to get receipt of keychains either from the doctors or distributors distributed for the purpose of development of the business of the assessee. The entire action of the authorities below is based on suspicion and therefore found untenable. Accordingly, the disallowance made on this account is deleted and the ground No. 3 of the appeal is allowed. This decision has been followed by Tribunal in subsequent AYs 2009-10 2011-12. Facts and circumstances being pari-materia the same, respectfully following the consistent view of the Tribunal, we delete the impugned additions of ₹ 9.08 Lacs. Ground No. 1.3 stands allowed whereas ground no. 1.4 becomes infructuous. 6.1 The next issue t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said expenses are not permitted by law; 1.7 erred in disallowing expenses aggregating to ₹ 5,32,72,615 by invoking Explanation 1 to section 37(1) of the Act. 1.8 erred in not appreciating the fact that the code of conduct laid down in the Indian Medical Council under Professional conduct etiquette ethics regulation 2002 issued with effect from 10 December 2009 applies only to medical practitioners. 1.9 erred in holding that these expenses are disallowable in view of Circular no. 05/2012 dated 1 August 2012 issued by Central Board of Direct Taxes read with the amendments made by the MCI Regulations. It transpired that during the course of its business, the assessee incurred a sum of ₹ 532.72 Lacs towards convention, education support, OPR course and symposium expenses in the nature of seminar and conference for sponsoring doctors and health care workers. These expenditures, in the opinion of Ld. AO, were against the guidelines issued by Medical Council and not in line with the professional ethics of the Doctors and therefore, not allowable. Another factor which led to the disallowance was that L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 92B; 3. not considering the merits in the case of the Applicant and with the sheer motive of keeping the issue alive and to protect the interest of the Department, upheld the reasons of TPO; 4. not considering the argument that AMP expenses purely represent the expenses incurred by the Applicant for the purpose of its business and have no bearing on any international transactions with Associated Enterprises ('AEs') and hence, it is not an international transaction; 5. ignoring that the alleged AMP expenses incurred by the Applicant represents only domestic transactions undertaken with third parties and are outside the purview of Section 92B of the Act and is thus in excess of his jurisdiction. 6. holding that the Applicant is developing marketing intangible by incurring alleged AMP expenses (such as selling commission and other selling expenses) instead of appreciating that such expenses were incurred for purely increasing the sales of the company 9.2 Facts qua the same are that certain international transactions carried out by the assessee during impugned AY with its Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal for AY 2009-10. 9.5 Upon careful consideration, we concur with the submissions that this issue is covered in assessee s favor by the order of Tribunal for AY 2009-10 wherein it has, inter-alia, been held that in the absence of any agreement, these transactions would not constitute international transaction. This decision has subsequently been followed in AY 2011-12. Facts circumstances being pari-materia the same, respectfully following the consistent view of the Tribunal, we hold that in the absence of any agreement between the assessee and its AEs, these transactions could not be termed as international transactions and accordingly, could not be subject to determination of ALP. By deleting impugned additions, this ground stands allowed. Finally, the appeal stands partly allowed in terms our above order. ITA No.6886/Mum/2017 (2013-14): 10. In this AY, the grievance of the assessee is on similar lines as in AY 2012-13 and the assessee is before us with similar grounds of appeal. For ease of reference, the additions under appeal could be tabulated in the following manner: - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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