TMI Blog2020 (10) TMI 1201X X X X Extracts X X X X X X X X Extracts X X X X ..... hri Ra jeev H arit, D.R. For the Respondent : Shri Ajay Kumar Rastogi, A.R. ORDER PER BENCH: The captioned appeals filed by the revenue are directed against the respective orders passed by the CIT(A)-4, Mumbai, dated 19.02.2019 18.02.2019 for A.Y. 2012-13 and A.Y. 2013-14, respectively, which in turn arises from the respective orders passed by the A.O under Sec. 143(3) r.w.s 263 of the Income Tax Act, 1961 (for short Act‟), dated 29.09.2017. As the issue involved in the captioned appeals is inextricably interlinked or in fact interwoven, the same, therefore are being taken up and disposed off together by way of a consolidated order. We shall first take up the appeal of the revenue for A.Y. 2012-13, wherein the impugned order has been assailed before us on the following ground of appeal: Whether on the facts and in the circumstances of the case and in law, the ITAT erred in holding that there is no prohibition by law within the meaning of Explanation 1 to Sec.37(1) of the Income Tax Act on claiming sales promotion expenses as deduction u/s.37(1) without appreciating the fact that providing freebies by pharmaceutical companies is a natural corollary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vide his order passed u/s 263, dated 31.03.2017 set aside the assessment order passed by the A.O under Sec.143(3), dated 06.01.2015, and directed him to reframe the assessment afresh after giving due opportunity to the assessee and considering the CBDT Circular No. 5/2012. 3. The A.O pursuant to the aforesaid order passed by the Pr.CIT under Sec. 263, therein framed the assessment under Sec.143(3) r.w.s 263, vide his order dated 29.09.2017. The A.O while giving effect to the aforesaid directions of the Pr.CIT, therein disallowed under Sec.37(1) the assessee‟s claim for deduction of ₹ 31.18 crores that was debited under the head sales promotion expenses. Accordingly, the A.O assessed the income of the assessee company vide his order passed under Sec.143(3) r.w.s 263, dated 29.09.2017 at ₹ 302,64,23,203/-. 4. Aggrieved, the assessee assailed the assessment framed by the A.O under Sec.143(3) r.w.s 263, dated 29.09.2017 before the CIT(A). Observing, that the Tribunal while disposing off the assessee‟s appeal against the order passed by the Pr.CIT-2, Mumbai, under Sec.263 of the Act, had quashed the order passed by the Pr.CIT under Sec.263, dated 31.03.201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heard the counsel and perused the records. The learned counsel of the assessee submitted that the A.O. in these cases has examined the issues and has duly applied his mind. He submitted that as a result of this application of mind, the A.O. has disallowed the sales promotion articles, which were found to be covered under freebies to doctors, prohibited under MCI guidelines and CBDT Circular. He submitted that the expenditure on medical conferences has been examined and found to be for the business of the assessee and the assessing officer has rightly allowed the same. In this regard, the ld. Counsel of the assessee placed reliance upon following case laws: 1. M/s. Aristo Pharmaceuticals Pvt. Ltd. (in ITA No. 6680/M/012 others vide order dated 26.07.2018); 2. M/s. Solvacy Pharma India Ltd. now merged with Abbott India Ltd. (in ITA No. 3585/Mum/2016 vide order dated 11.01.2018); 3. D. D. Pharmaceutical (P.) Ltd. vs. Asst. CIT (in ITA No.772/JP/2014 vide order dated 12.12.2017); 4. Asst. CIT vs. M/s. Geno Pharmaceuticals Ltd. (in ITA No. 12/PNJ/2014 vide order dated 30.05.2014); 5. Ensure Pharmaceuticals Ltd. vs. DCIT (in ITA No.1532/Pun/2015 vide order dated 29.01. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent records, the copy of all the ledger account which he has examined. Furthermore, the ld. CIT is fully aware of the case law cited by the assessee before him wherein similar expenses were allowed by the ITAT. He has not followed the same holding that it has been appealed against in High Court. Just because the ITAT order has been appealed before High Court, it will not cease to have binding effect on the ld. CIT. It will always be considered to be a permissible view. Hence, if the A.O. adopts a legally permissible view the same cannot be the subject to revision u/s. 263 of the Act. 17. Furthermore while concluding, the ld. CIT has observed that the A.O. shall take into account the binding judicial precedence which may become available on the subject. In this connection, we note that in assessee's own case the ITAT in ITA Nos. 5479 5747/Mum/2015 and others for A.Y. 2012 - 13 and others vide order dated 26.07.2018 has allowed the assessee's appeals and dismissed the Revenues appeals. The issue involved was the allowability of similar expenses. In this view of the matter, we find that admittedly the decision of tribunal is binding upon the A.O. Hence the order u/s. 263 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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