TMI BlogBattle on Freebies to doctors before AY 2010-11: ‘Reason’is the link between ‘conclusion’ and ‘evidence’ for reopening assessment; Law applicable in relevant AY to be applied onlyX X X X Extracts X X X X X X X X Extracts X X X X ..... Battle on Freebies to doctors before AY 2010-11: ‘Reason’is the link between ‘conclusion’ and ‘evidence’ for reopening assessment; Law applicable in relevant AY to be applied only - By: - Vivek Jalan - Income Tax - Dated:- 21-2-2023 - - While re-opening assessments, the reasons recorded should be clear and unambiguous and should not suffer from any vagueness. Reasons provide the link between ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idence and conclusion. Reasons are based on evidence which lead to a conclusion that some income has escaped assessment and due to which the same should be re-opened. This reason should disclose the fact and material not disclosed by the assessee fully and truly. The same was held by The Bombay High Court In the case of HINDUSTAN LEVER LTD. VERSUS RB. WADKAR, ASSISTANT COMMISSIONER OF INCOME-TA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... X AND OTHERS (NO. 1) - 2004 (2) TMI 41 - BOMBAY HIGH COURT . As far as freebies to doctors being disallowed as per Circular No.5/2012 is concerned, the same referred to the position of the regulations of 2002 after its amendment in the year 2009 and, therefore, neither the circular nor regulation 6.8 incorporated w.e.f. 10 December 2009 would apply to cases pertaining to earlier assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... years. In the case of M/S APEX LABORATORIES PVT. LTD. VERSUS DEPUTY COMMISSIONER OF INCOME TAX, LARGE TAX PAYER UNIT - II - 2022 (2) TMI 1114 - SUPREME COURT , where the assessee being a pharmaceutical company had incurred expenditure by giving freebies to the medical practitioners and accordingly, claimed exemption for the said expenditure under Section 37(1) of the Act for the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment year 2010-11; The assessing offcer partially allowed the exemption claimed by the assessee on the expenses so incurred by placing reliance upon Circular No.5/12 . The CIT (Appeals), Tribunal, as also the jurisdictional High Court upheld the said Order and subsequently, also by the Apex Court. However, in the aforementioned case, the claim before the Apex Court pertained to the assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt yea 2010- 11, to which amendment incorporated in the Regulations 2009 was squarely applicable. The second thing which needs to be highlighted is that in the aforementioned case, the revenue had permitted partial exemption for expenses incurred till 14 December 2009 and held the assessee eligible for the benefit under Section 37(1) but disallowed the expenses incurred thereafter in view of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amendment of 2009. The Apex Court in fact in the judgment Apex Laboratories (P.) Ltd. (supra), has also clearly held that the CBDT Circular being clarifcatory in nature and was in effect from the date of implementation of Regulation 6.8 of 2002 Regulations, i.e. from 14 December 2009. Hence, law to be applied is the one that is in force in the relevant assessment year, unless otherwise provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded expressly or by necessary implication - COMMISSIONER OF INCOME-TAX, WEST BENGAL VERSUS ISTHMIAN STEAMSHIP LINES - 1951 (11) TMI 1 - SUPREME COURT and RELIANCE JUTE AND INDUSTRIES LIMITED VERSUS COMMISSIONER OF INCOME-TAX, WEST BENGAL - 1979 (10) TMI 2 - SUPREME COURT . On the basis of the above the re-opening in the case of ABBOTT INDIA LIMITED, (AS SUCCESSOR OF SOLVAY PHARMA INDIA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... LTD.) VERSUS THE ASSISTANT COMMISSIONER OF INCOME-TAX CIRCLE 2 (1) (1) , MUMBAI THE COMMISSIONER OF INCOME TAX-2, MUMBAI, UNION OF INDIA - 2023 (2) TMI 468 - BOMBAY HIGH COURT , was quashed. - - Scholarly articles for knowledge sharing authors experts professionals Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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