TMI Blog2019 (5) TMI 1681X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the ITAT in assessee s own case for AY 2009-10 [ 2015 (12) TMI 1673 - ITAT MUMBAI ] granted depreciation on plant and machinery and building. Disallowance of payment to doctors - AO disallowed convention expenses incurred by the appellant u/s 37(1) on the ground that it was in violation of clause 6.8 of the MCI Regulations and consequently, was in violation of the CBDT Circular No.5/2012 dated 01.08.2012 - HELD THAT:- ITAT in assessee s own case for the AY 2010-11, relying on the decision of Max Hospital [ 2014 (1) TMI 1829 - DELHI HIGH COURT ] and PHL Pharma [ 2017 (1) TMI 771 - ITAT MUMBAI ] held that (i) MCI guidelines are applicable to the professionals i.e. Doctors only and do not govern the other tax entities or individuals other than doctors and (ii) MCI, as a body can formulate policy for Doctors and the appellant is not a practicing professional and therefore, any guidelines issued by it cannot decide the allowability or otherwise of an expenditure under the Act. Facts being identical, we follow the above order of the Co-ordinate Bench. Depreciation on non-compete fees - HELD THAT:- ITAT in assessee s own case for AYs 2003-04, 2004-05, 2008-09, 2011 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he ITAT, then an amount of ₹ 31,20,82,850/- spent as convention expenses by the appellant should be compensated by the AE as these expenses were spent for brand intangibles in India. The AO in the final assessment order upheld the transfer pricing adjustment of ₹ 13,34,52,541/- on account of AMP expenses made by the TPO and also as per the direction issued by the Dispute Resolution Panel (DRP). 2.2 Before us, the Ld. counsel of the assessee submits that the AMP expenses incurred represent only domestic transactions undertaken with third parties and are outside the purview of section 92B of the Act. Thus it is stated that AMP expenses incurred by the appellant is not an international transaction. The Ld. counsel further submits that the ITAT in assessee s own case for AY 2010-11 (ITA No. 1600/M/2015) dated 17.01.2018, after analysing the distribution agreement, held that in absence of any agreement for sharing AMP expenses, it cannot be held to be an international transaction. Further, it held that if the AE was benefited indirectly by the AMP expenditure incurred by the appellant, it cannot be held that it had entered into agreement for s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3.4.We have heard the rival submissions. We find that the TPO had held that assessee should have been compensated by its AE for the AMP expenditure incurred by it. We have gone through the agreements entered in to by the AE.s with the assessee, that in the agreements there is no condition about sharing of AMP, that the agreements talks of using best efforts to market and distribute the product or promote the products in a commercially reasonable manner. In our opinion, these terms do not give any indication that the AE and the assessee had to share AMP expenses. Secondly, if the AE was benefitted indirectly by the AMP expenditure incurred by the assessee, it cannot be held that it had entered into agreement for sharing AMP expenses. We are also of the opinion that Bright Line Method should not have been applied by the TPO. We would like to reproduce the relevant portion of the order of the Thomas Cook(supra), wherein the identical issue has been dealt in length, and it reads as under: . 2.4.1 Facts being identical, we follow the above order of the Co-ordinate Bench and delete the impugned adjustment. Thus the 2nd to 27th ground of appeal are allowed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0/- incurred by the appellant u/s 37(1) on the ground that it was in violation of clause 6.8 of the MCI Regulations and consequently, was in violation of the CBDT Circular No.5/2012 dated 01.08.2012. However, the DRP granted relief of ₹ 1,38,86,039/- in respect of educational grants provided to various organizations including hospitals for organizing continuing education meetings, considering the same cannot be linked with direct benefit claimed by the doctors and accordingly not covered by MCI Regulations. 4.1 Before us, the Ld. counsel submits that the issue is covered in favour of the appellant in assessee s own case for AY 2010-11 (ITA No. 1600/Mum/2015) dated 17.01.2018, and for AY 2011-12 (ITA No. 1246/Mum/2016) dated 02.05.2018. 4.2 On the other hand, the Ld. DR relies on the order of the AO. 4.3 We have heard the rival submissions and perused the relevant materials on record. We find that the ITAT in assessee s own case for the AY 2010-11, relying on the decision of Max Hospital (WPC 1334/2013) (Del) and PHL Pharma (163 ITD 10) (ITAT Mumbai) held that (i) MCI guidelines are applicable to the professionals i.e. Doctor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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