TMI Blog2020 (1) TMI 777X X X X Extracts X X X X X X X X Extracts X X X X ..... arma Limited ( [ 2017 (1) TMI 771 - ITAT MUMBAI] (which has been co-authored by one of us) would equally apply to this issue also - we direct for deletion of disallowance of medical conference expenditure as sustained by learned first appellate authority. Resultantly, the grounds raised by the assessee stands allowed. - I.T.A. No.1104/Mum/2018, 1972/Mum/2018 (Assessment Year:2014-15) - - - Dated:- 15-1-2020 - HON BLE SHRI MAHAVIR SINGH, JM AND HON BLE SHRI MANOJ KUMAR AGGARWAL, AM Assessee by: Shri Ajay Kumar Rastogi- Ld. AR Revenue by: Shri Anadi Varma - Ld.CIT-DR And Shri V. Vinod Kumar-Ld.DR ORDER Manoj Kumar Aggarwal (Accountant Member) :- 1. Aforesaid cross-appeals for Assessment Year [in short referred to as AY ] 2014-15 contest the order of Ld. Commissioner of Income-Tax (Appeals)-4, Mumbai, [in short referred to as CIT(A) ], Appeal No. CIT(A)-4/IT-268/DCIT-2(1)(1) dated 15/01/2018. The grounds raised by the assessee read as under: - 1. For that the Ld. CIT(A) has erred in sustaining disallowance of ₹ 1,04,96,044/- being expenditure incurred on 'S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2014. 12. For that the Ld. CIT(A) has erred has erred in holding that the order of Hon'ble Tribunal cannot be blindly applied in view of decision of the Hon'ble Himachal Pradesh High Court. 13. For that the Ld. CIT(A) has erred has erred in holding that since the expenditure incurred is in violation of Regulations framed by MCI and, therefore, the same is not an allowable deduction. 14. For that the Ld. CIT(A) has erred in holding that the ITAT, Mumbai Bench had no occasion to consider that the Regulations have been issued by MCI in exercise of power u/s 33 of the MCI Act, 1956 by following proper procedure and mandate of law and accordingly would come within the ambit of 'delegated legislation' and violation thereof would be hit by Explanation to Section 37. 15. For that the Ld. CIT(A) has erred in holding that the decision of the ITAT in its entirety is not applicable to the appellant's case. 16. For that the Ld. CIT(A) has erred in ignoring the judgment of Hon'ble Delhi High Court in the case of Max Hospital. 17. For that the sustenance of disallowance of ͅ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... During assessment proceedings, it was pointed out by the assessee that substantial relief was granted, on this account, by first appellate authority for AYs 2011-12 2012-13 and the cross-appeals were pending before the Tribunal. However, following consistent stand taken by department in AYs 2011- 12 to 2013-14, the entire expenditure of ₹ 1498.07 Lacs was disallowed by Ld. AO and added back to the income of the assessee. 2.3 The Medical Conference Expenditure of ₹ 2363.65 Lacs, as per assessee s submissions dated 20/12/2016, represented Registration fees directly paid to organizers for doctors attending the conferences, travelling expenses of doctors for attending conferences, stay charges for attending conferences, food expenditure during conferences, expenditure on stall and other activity, expenditure on holding medical camps for detection and awareness of diseases and expenditure on distribution of gift articles etc. The head-wise break-up of the expenditure has already been tabulated in para 6.2 of the quantum assessment order. 2.4 In defense of allowability of medical conference expenditure, the assessee submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion was drawn to the fact that since both the disallowances were made on similar reasoning, the assessee s defense as made for disallowance of sale promotion expenditure would equally apply to this disallowance also. Reliance was also placed on the favorable decision of Mumbai Tribunal rendered in DCIT V/s PHL Pharma Limited (ITA No. 4605/Mum/2014 order dated 12/01/2017) stated to be rendered under similar factual matrix. 3.4 However, not convinced, Ld. CIT(A) rejected various pleas raised by the assessee, inter-alia, by observing that the assessee was not able to satisfy Assessing Officer that the expenditure was not in violation of regulations framed by MCI. It was also observed that the cited decision of Mumbai Tribunal did not consider the aspect that when the regulations were issued u/s 33 of Indian Medical Council Act, 1956 by competent authority as per proper procedure and mandate of law, the same would constitute delegated legislation and therefore, the violation of the same would be hit by explanation to Section 37(1). Finally, the said disallowance was confirmed. Aggrieved, the assessee is under further appeal before us. 4.1 We have caref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sec. 21 of the said Act. We are of the considered view that the scheme of the Indian Medical Council Act, 1956 neither deals with nor provides for any conduct of any association/society and deals only with the conduct of individual registered medical practitioners. In the backdrop of the aforesaid facts, it emerges that the applicability of the MCI regulations would only cover individual medical practitioners and not the pharmaceutical companies or allied health sector industries. Interestingly, the scope of the applicability of the MCI regulations was looked into by the Hon'ble High Court of Delhi in the case of Max Hospital, Pitampura v. Medical Council of India (CWP No. 1334/2013, dated 10.01.2014). In the aforementioned case the MCI had filed an 'Affidavit' before the High Court, wherein it was deposed by the council that its jurisdiction is limited only to take action against the registered medical professionals under the Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations, 2002, and it has no jurisdiction to pass any order affecting the rights/interest of the petitioner hospital. We are of the considered view that on the basis of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions are applicable to medical practitioners registered with the MCI, then the same cannot be made applicable to pharmaceutical companies or other allied healthcare companies. 22. We shall now advert to the CBDT Circular No. 5/2012, dated 01.08.2012. We find that the aforesaid CBDT Circular reads as under:- Inadmissibility of expenses incurred in providing freebees to medical practitioner by pharmaceutical and allied health sector industry Circular No. 5/2012 [F.No. 225/142/2012-ITA.II], dated 1-8-2012 It has been brought to the notice of the Board that some pharmaceutical and allied health sector Industries are providing freebess (freebies) to medical practitioner and their professional associations in violation of the regulations issued by Medical Council of India (the 'Council') which is a regulatory body constituted under the Medical Council Act, 1956 2. The council in exercise of its statutory powers amended the Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations, 2002 (the regulations) on 10-12- 2009 imposing a prohibition on the medical practitioner an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l practitioners/doctors registered with the MCI, however the same cannot impinge on the conduct of the pharmaceutical companies or other healthcare sector in any manner. We find that nothing has brought on record which could persuade us to conclude that the regulations or notifications issued by MCI would as per the law also be binding on the pharmaceutical companies or other allied healthcare sector. Rather, the concession made by the MCI before the Hon'ble High Court of Delhi in the case of Max Hospital v. MCI (CWP No. 1334/2013, dated 10.01.2014) fortifies our aforesaid view that MCI has no jurisdiction to pass any order or regulation against any hospital, pharmaceutical company or any healthcare sector. We further find that MCI had by adding Para 6.8.1 to its earlier notification issued as Indian Medical Council Professional (Conduct, Etiquette and Ethics) Regulations, 2002 had even provided for action which shall be taken against medical practitioners in case they contravene the prohibitions placed on them. We find from a perusal of Para 6.8.1 that in case of receiving of any gift from any pharmaceutical or allied healthcare industry and their sales people or representat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cular No. 5/2012, dated 01.08.2012, which we would not hesitate to observe, despite absence of anything provided by the MCI in its regulations issued under the Medical Council Act, 1956, contemplating that the regulation of code of conduct would also cover the pharmaceutical companies and healthcare sector, however provides that in case a pharmaceutical or allied health sector industry incurs any expenditure in providing any gift, travel facility, cash, monetary grant or similar freebies to medical practitioners or their professional associations in violation of the Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations, 2002, the expenditure incurred on the same shall be disallowed in the hands of such pharmaceutical or allied health sector industry. We are of the considered view that the burden imposed by the CBDT vide its aforesaid Circular No. 5/2012, dated 01.08.2012 on the pharmaceutical or allied health sector industries, despite absence of any enabling provision under the Income Tax law or under the Indian Medical Council Regulations, clearly impinges on the conduct of the pharmaceutical and allied health sector industries in carrying out its busine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e revised to reclassify the single panel circuit breakers under heading No.85.37 of the tariff, such reclassification can take effect only prospectively from the date of communication of the show-cause notice proposing reclassification. We find that the aforesaid CBDT Circular No. 5/2012, dated 01.08.2012 had came up for consideration before a coordinate bench of the Tribunal in the case of DCIT v. PHL Pharma (P) Ltd. [2017] 49 CCH 124 (Mum), wherein the Tribunal after deliberating at length on two aspects viz. (i) validity of the circular in the backdrop of enlargement of scope of MCI regulation to the pharmaceutical companies by the CBDT, without any enabling provisions either under the Income Tax Law or under the Indian Medical Council Regulations; and (ii). the prospective applicability of the circular, had observed as under: 5. We have considered the rival contentions made by ld. CIT DR as well as ld. Sr. Counsel, Mr J.D. Mistry, perused the relevant finding given in the impugned orders and material referred to before us. The entire controversy revolves around, whether the expenditures in question incurred by the assessee (a pharmaceutical c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l and allied health sector Industries. 3. Section 37(1) of Income Tax Act provides for deduction of any revenue expenditure (other than those failing under sections 30 to 36) from the business Income if such expense is laid out/expended wholly or exclusively for the purpose of business or profession. However, the explanation appended to this sub-section denies claim of any such expense, if the same has been incurred for a purpose which is either an offence or prohibited by law. Thus, the claim of any expense incurred in providing above mentioned or similar freebees in violation of the provisions of Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations, 2002 shall be inadmissible under section 37(1) of the Income Tax Act being an expense prohibited by the law. This disallowance shall be made in the hands of such pharmaceutical or allied health sector Industries or other assessee which has provided aforesaid freebees and claimed it as a deductible expense in its accounts against income. 4. It is also clarified that the sum equivalent to value of freebees enjoyed by the aforesaid medical practitioner or pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d family members under any pretext. (d) Cash or monetary grants: A medical practitioner shall not receive any cash or monetary grants from any pharmaceutical and allied healthcare industry for individual purpose in individual capacity under any pretext. Funding for medical research, study etc. can only be received through approved institutions by modalities laid down by law/rules/guidelines adopted by such approved institutions, in a transparent manner. It shall always be fully disclosed. (e) Medical Research: A medical practitioner may carry out, participate in work, in research projects funded by pharmaceutical and allied healthcare industries. A medical practitioner is obliged to know that the fulfilment of the following items: (i) to (vii) will be an imperative for undertaking any research assignment/project funded by industry for being proper and ethical. Thus, in accepting such a position a medical practitioner shall:- (i) Ensure that the particular research proposal(s) has the due permission from the competent concerned authorities. (ii) Ensure that such a research project(s) has the cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioners/doctors alone. It illustrates the various kinds of conduct or activities which a medical practitioner should avoid while dealing with pharmaceutical companies and allied health sector industry. It provides guidelines to the medical practitioners of their ethical codes and moral conduct. Nowhere the regulation or the notification mentions that such a regulation or code of conduct will cover pharmaceutical companies or healthcare sector in any manner. The department has not brought anything on record to show that the aforesaid regulation issued by Medical Council of India is meant for pharmaceutical companies in any manner. On the contrary, before us the learned senior counsel, Shri Mistry brought to our notice the judgment of Hon'ble Delhi High Court in the case of Max Hospital v. MCI in WPC 1334/2013 judgment dated 10.01.2014, wherein the Medical Council of India admitted that the Indian Medical Council Regulation of 2002 has jurisdiction to take action only against the medical practitioners and not to health sector industry. Relevant portion of the said judgment reads as under: 6. The Petitioner's grievance is two fold. Firstly, that since the Med ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on to go into the same, the observations were uncalled for and cannot be sustained. [Emphasis added is ours] From the aforesaid decision, it is ostensibly clear that the Medical Council of India has no jurisdiction to pass any order or regulation against any hospital or any healthcare sector under its 2002 regulation. So once the Indian Medical Council Regulation does not have any jurisdiction nor has any authority under law upon the pharmaceutical company or any allied health sector industry, then such a regulation cannot have any prohibitory effect on the pharmaceutical company like the assessee. If Medical Council regulation does not have any jurisdiction upon pharmaceutical companies and it is inapplicable upon Pharma companies like assessee then, where is the violation of any of law/regulation? Under which provision there is any offence or violation in incurring of such kind of expenditure. The relevant provision of section 37(1) reads as under: (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), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hile clarifying the applicability of Explanation 1 to section 37(1) on medical practitioners and pharmaceutical companies have interpreted that Indian Medical Council Regulation is applicable for pharmaceutical companies also. He also brought to our notice that another notification was issued by Indian Medical Council which was published on 01.12.2016 which further prohibits such kind of embargo on medical practitioners and have added para 6.8.1 and also given instances of action which shall be taken upon medical practitioners. The relevant clause of the said notification as relied upon by him is reproduced hereunder: 6.8. Code of conduct for doctors in their relationship with pharmaceutical and allied health sector industry. The Section 68.1(b) shall be substituted in terms of Notification published on 01.02.2016 in Gazette of India, as under: (b) Travel facilities: A medical practitioner shall not accept any travel facility inside the country or outside, including rail, road, air, ship, cruise tickets, paid vacation, etc., from any pharmaceutical or allied healthcare industry or their representatives for self and family member ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ix) months. Expenses for travel facilities more than more than ₹ 50,000/- to ₹ 1,00,000/-: Removal from Indian Medical Register or State Medical Register for 1 (one) year. Expenses for travel facilities more than ₹ 1,00,000/-: Removal for a period of more than 1 (one) year from Indian Medical Register or State Medical Register. (c) Hospitality: A medical practitioner shall not accept individually any hospitality like hotel accommodation for self and family members under any pretext. Expenses for Hospitality more than ₹ 1,000/-upto ₹ 5,000/-: Censure Expenses for Hospitality more than ₹ 5,000/- upto ₹ 10,000/-: Removal from Indian Medical Register or State Medical Register for 3 (three) months. Expenses for Hospitality more than ₹ 10,000/- to ₹ 50,000/-: Removal from Indian Medical Register or State medical Register for 6 (six) months. Expenses for Hospitality more than more than ₹ 50,000/- to ₹ 1,00,000/: Removal from Indian Medical Register or State Medical Register for 1 (one) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Indian Medical Register or State Medical Register for a certain period of time and it does not impinge upon the conduct of pharmaceutical companies. This important distinction has to be kept in mind that regulation issued by Medical Council of India is qua the doctors/medical practitioners and not for the pharmaceutical companies. As a logical corollary to it, if there is any violation or prohibition as per MCI regulation in terms of section 37(1) r.w. Explanation1, then it is only meant for medical practitioners and not for pharmaceutical company (Assessee Company) for claiming the expenditure. 9. Adverting to the contention of the Ld. CIT DR that CBDT is well empowered to issue such clarification, it is seen that the CBDT Circular dated 01.08.2012 (supra) in its clarification has enlarged the scope and applicability of 'Indian Medical Council Regulation 2002' by making it applicable to the pharmaceutical companies or allied health care sector industries. Such an enlargement of scope of MCI regulation to the pharmaceutical companies by the CBDT is without any enabling provisions either under the provisions of Income Tax Law or by any provisions under th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts and medicines manufactured and launched by it. Under Key Account Management, the assessee makes endeavour to create awareness amongst certain class of key doctors about the products of the assessee and the new developments taking place in the area of medicine and providing correct diagnosis and treatment of the patients. The said activities by the assessee are to make the doctors aware of its products and research work carried out by it for bringing the medicine in the market and its results are based on several levels of tests and approvals. Unless the pharmaceutical companies make aware of such kind of products to key doctors or medical practitioners, then only it can successfully launch its products/medicines. This kind of expenditure is definitely in the nature of sales and business promotion, which has to be allowed. Coming to the gift articles and free samples of medicines, it is seen that the assessee gives various kind of articles like, diaries, pen sets, calendars, paper weights, injection boxes etc. embossed with bold logo of its brand name and the product name so that the doctors remembers the brand of the assessee and also the name of the medicine. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not in violation of the regulation framed by the medical council, then it may legitimately claim the deduction. The assessee has to satisfy the AO that the expenditure is not in violation of the Medical Council regulation. Thus, if the assessee brings out that the MCI regulation is not applicable to the assessee before the AO, the same cannot be applied blindly. 12. At the time of hearing, our attention was also drawn to the decision of Tribunal of our Coordinate Bench in the case of 'Liva Healthcare Limited ITA Nos. 904 945/Mum/2013', decided vide order dated 12.09.2016. In counter, to this decision the learned counsel, Shri JD Mistry distinguished the said judgment and submitted that the facts of the case in the Liva Healthcare (supra) were substantially different from the facts of the present case. In the case of Liva Healthcare, the Hon'ble Tribunal disallowed such expenses u/s. 37(1) of the Act on the ground that they were not incurred wholly and exclusively for the purpose of business as the same were incurred to create good relations with the doctors in lieu of expected favours from doctors for recommending to the patients the pharmaceutical ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctors and their spouses which in our view appears to be clearly a distinguishable feature in this year enabling us to take a divergent view and the expenses incurred by the assessee cannot be allowed as business expenditure u/s. 37 of the Act as it is clearly hit by explanation to Section 37 of the Act being against public policy as unethical prohibited by law. In view of the above, he pointed out that in the above decision for A.Y. 2009-10 in the case of Liva Healthcare, there was a specific finding of a fact that no details have been filed with respect to any seminar has been conducted for doctors and that the trips were directed towards leisure and entertainment of doctors and their spouses. This was a distinguishable feature for the Hon'ble Tribunal to take a contrary view from A.Y. 2008-09. He further submitted that the Hon'ble Tribunal in the case of Liva Healthcare Ltd. v. ACIT (ITA No. 4791/Mum/2014) for A.Y. 2010-11 has followed the decision of Liva Healthcare (supra) for A.Y. 2008-09 and has decided this issue in favour of the assessee. This, further brings out the fact that the Hon'ble Tribunal disallowed the expenses u/s. 37(1) of the Act i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee is free to demonstrate before the AO that this circular is not applicable on facts of the case; and secondly, CBDT circular which creates new impairment and imposes disallowbility not envisaged in any of the Act or regulation cannot be reckoned to be retrospective. Another strong reference has been made to the decision of Hon'ble Punjab Haryana High Court in the case of CIT v. Kap Scan and Diagnostic Centre (P.) Ltd. [2012] 25 taxmann.com 92, wherein commission was paid to the private doctors for referring the patients for diagnosis to the assessee company. In background of these facts and issues involved, the Hon'ble High Court held that said payment of commission is wrong and is opposed to be a public policy. It should be discouraged as it is not a fair practice. The ratio of said decision cannot be applied on the facts of the present case because there is no violation of any law or anything which is opposed to public policy. Similarly, there is reference to the decision of Hon'ble Supreme Court in the case of Eskayef (Now Known as Smithkline Beecham) Pharmaceuticals (India) Limited v. CIT (2000) 111 Taxman 561(SC), which was given in context of Section 37(3A) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... practitioners registered with the council, the Tribunal had concluded that the guidelines issued by MCI would only regulate the code of conduct of the doctors and the medical practitioners registered with it and would not be applicable to other entities. 25. We thus, in the backdrop of the aforesaid settled position of law as regards the prospective applicability of an oppressive circular, are of the considered view that as the CBDT as per its Circular No. 5/2012, dated 01.08.2012 had enlarged the scope of Indian Medical Council Regulation, 2002, and had made the same applicable to the pharmaceutical companies, thus the same cannot be reckoned to have a retrospective effect. We find that a coordinate bench of the Tribunal viz. ITAT, Mumbai in the case of Syncom Formulations (I) Ltd. v. DCIT-8(3), Mumbai (ITA No. 6428 6429/Mum/2012, dated 23.12.2015) for A.Ys 2010-11 and 2011-12 had concluded that the aforesaid CBDT Circular No. 5/2012, dated 01.08.2012 would not be applicable to the A.Ys 2010-11 and 2011-12, as the same was introduced w.e.f. 01.08.2012. We thus, in terms of our aforesaid observations are of the considered view that the aforementioned CBDT Circula ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee-company which was running a scanning and a diagnostic centre to the private doctors for referring patients for diagnosis/scanning. Thus, the facts involved in the case before the High Court are distinguishable as against those in the case of the assessee before us. Still further, the said judgment was also considered by the Tribunal while passing the order in the case of DCIT-8(2), Mumbai v. PHL Pharma (P.) Ltd. 27. We thus, in terms of our aforesaid observations conclude that the assessee was duly entitled for claim of sales promotion expenses of ₹ 9,70,82,317/- incurred on the distribution of articles to the stockists, distributors, dealers, customers and doctors. Thus, the order of the CIT(A) sustaining the disallowance of the sales promotion expenses to the extent of ₹ 66,49,685/- is set aside. In terms of our aforesaid observations the entire disallowance of the sales promotion expenses of ₹ 9,70,82,317/-made by the AO is deleted. 28. The appeal of the assessee viz. ITA No. 5553/Mum/2014 is allowed and the appeal of the revenue viz. ITA No. 6129/Mum/2014 is dismissed. ITA No. 5479 5747/Mum/2015 A.Y. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case. 2. On the facts and in the circumstances of the case and in law, the CIT(A) has erred in allowing all sales promotion articles costing up to the cost price of ₹ 750/- each u/s. 37(1), on the ground that these are wholly and exclusively incurred for the assessee's business purposes when supporting evidences have not been furnished by the assessee. 3. On the facts and in the circumstances of the case and in law, the CIT(A) has erred in allowing sales promotion expenses, without appreciating the prohibition imposed b the Medical Council of India on medical practitioners from accepting gifts, travel facilities, hospitality, cash or monetary grants (freebies) from pharmaceutical and allied healthcare sector Industry and the Circular No. 5/2012 issued by CBDT not to allow such expenses which are prohibited by law. 31. Briefly stated, the assessee-company had e-filed its return of income for A.Y. 2012-13 on 21.09.2012, declaring a total income of ₹ 270,68,80,787/-. The case of the assessee was thereafter taken up for scrutiny assessment under Sec. 143(2) of the Act. The A.O inter alia carrying out a disallowance of & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same, as was there before us in the assesses own case for the immediately preceding year viz. A.Y. 2011-12 as had been adjudicated by us hereinabove, except for the fact that in the present case the CBDT Circular No. 5/2012, dated 01.08.2012 had came into force during the year under consideration. Be that as it may, we are of the considered view that as deliberated by us at length hereinabove, the aforementioned CBDT Circular No. 5/2012, dated 01.08.2012 had enlarged the scope of MCI regulations and made the same applicable to the pharmaceutical companies, without any enabling provision either under the Income Tax Act or the Indian Medical Council Regulations. We are of the considered view that as observed by us hereinabove, the CBDT by extending the scope and gamut of the MCI Regulation had by so doing traversed beyond the scope of its jurisdiction and provided casus omissus to the regulation issued by MCI, which though had not been expressly provided therein. We thus, being of the view that as the CBDT is divested of its power to create a new impairment adverse to an assessee or to a class of assessee without any sanction or authority of law, therefore, are unable to persuade ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustaining the disallowance of the sales promotion expenses to the extent of Rs, 77,42,416/- is set aside. The entire disallowance of the sales promotion expenses of ₹ 11,37,45,179/- made by the A.O is deleted.' This decision has subsequently been followed by Tribunal in cross-appeals for AY 2013-14 vide ITA Nos.5807,6223/Mum/2017 order dated 28/06/2019. Therefore, facts being pari-materia the same, respectfully following the aforesaid consistent view of the Tribunal, we hold that the entire expenditure of ₹ 1498.07 Lacs incurred by assessee on sales promotional article would be an allowable deduction. The grounds raised by the assessee, in this regard stand allowed whereas the grounds raised by revenue stand dismissed. The impugned order stand modified to that extent. 5.1 Regarding disallowance of medical conference expenditure, it is the submissions of Ld. Sr. Counsel that this expenditure was never disallowed in earlier years but the same has been disallowed for the first time in this year. Nevertheless, since the reasoning applied by revenue to disallow the same is pari-materia the same as applied while disallowing expenditure on s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been made for the first time in this year which is evident from assessment orders for AY 2008- 09 to 2013-14, as placed on record. In other words, the genuineness of the expenditure was never under doubt either in earlier assessment years or in the year under consideration. The reasoning applied by lower authorities to disallow the same stem from same reasoning logic as applied to disallow expenditure on sales promotional articles. This being the case, our adjudication as well as reliance on orders of Tribunal in assessee s own case for earlier years as well as reliance on the decision of this Tribunal in DCIT V/s PHL Pharma Limited (supra) (which has been co-authored by one of us) would equally apply to this issue also. Therefore, convinced with various arguments raised by Ld. Sr. Counsel as enumerated by us in preceding paragraphs and respectfully following the earlier decisions of Tribunal, we direct for deletion of disallowance of medical conference expenditure as sustained by learned first appellate authority. Resultantly, the grounds raised by the assessee stands allowed. 6. Finally, the appeal of the revenue stand dismissed whereas the appeal of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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